Example 1

Table 1 shows the sales revenue and advertisement expenses of a company for the past 10 months. Find the
coefficient of correlation between sales and advertisement.

Table 1

Sales and advertisement for 10 months.

Month Jan Feb Mar Apr May Jun Jul Aug Sept Oct
Advertisement 10 11 12 13 11 10 9 10 11 14
(in Thousand
Rupees)
Sales (in 110 120 115 128 137 145 150 130 120 115
thousand
rupees)

Example 2
Table 2 exhibits consumption of electricity (in gigawatt hours) by industry, agriculture, domestic and commercial
sectors in India. Compute the range of electricity consumption for these sectors.

Table 2

Consumption of electricity (in gigawatt hours) by industry, agriculture, domestic and commercial sectors in India
from 1994-1995 to 2004-2005.

Year Industry Agriculture Domestic Commercial

1994-1995 100,126 79,301 47,915 15,973
1995-1996 104,693 85,732 51,733 16,996
1996-1997 104,165 84,019 55,267 17,519
1997-1998 104,926 91,242 60,346 19,367
1998-1999 105,080 97,195 64,973 19,799
1999-2000 106,728 90,934 70,520 21,161
2000-2001 107,622 84,729 75,629 22545
2001-2002 107,296 81,673 79,694 24,139
2002-2003 114,959 84,486 83,355 25,437
2003-2004 124,573 87,089 89,736 28,201
2004-2005 137,589 88,555 95,660 31,381

Example 3
In a grocery store, the mean expenditure per customer is Rs. 2000 with a standard deviation of Rs. 300. If a random
sample of 50 customers selected, what is the probability that the sample average expenditure per customer is
more than Rs. 2080?
Example 4
For example 3, determine the probability that the sample average expenditure per customer is between Rs. 2040
and Rs. 2080.

Example 5
The bottled water segment in India has witness’s rapid growth. Institutional users are responsible for 30% sales in
the market. If 100 customers are randomly selected, what is the probability that 25 or more customers are
institutional users?

Example 6
Unisys.com is one of the most frequented b2b websites. According to WSJ, business partners accessing Unisys
spend an average of 65.7 minutes, possibly the longest average time per visit of any b2b website. Assume that the
length of a visit on the Unisys website is distributed as a normal random variable with a standard deviation of 15
minutes.

a. What is the probability that a randomly selected visit will last more than 90 minutes?
b. What is the probability that a randomly selected visit to Unisys.com will last between 60 and 90 minutes?
c. Only 20% of the visits will last less than how many minutes?
d. Between what two values (in minutes) symmetrically distributed around the population mean will 90% of
the visits last?

Example 7
By the year 2014-2015, the telephone instrument industry is estimated to grow by 106.20 millions units as
compared to 1993-1994 when the total market size was only 3 million units. Bharti Terletech, BPL Telecom, ITI
(Indian Telephone Industries, Bharti Systel, Tata Telecom and Godrej Telecom are some of the major players in the
market. Bharti Teletech has a market share of 24%. If 200 purchases of telephone instruments are randomly
selected, what is the probability that 55 or more are Bharti Teletech customers?

Example 8
A researcher has taken a random sample of size 70 from a population with a sample mean of 35 and a population
standard deviation of 4.62. Construct a 90% confidence interval to estimate the population mean.

Example 9
A researcher wants to measure the income level of employees working in a company. The total employee strength
of the company is 1200. A random sample of 50 employees reveals that the average income of sampled employees
is Rs 15,000. Historical data reveals that the standard deviation of the income of the employee is approximately Rs.
1500. Construct a 99% confidence interval for obtaining the average income of all the employees working in this
company.

Example 10
The personnel department of an organization wants to apply cost-cutting measures for improving efficiency. As the
first step, the personnel department wants to curtail telephone expenses incurred by employees. For this,
personnel department has taken a random sample of 10 employees and gathered the following data about
telephone expenses (in thousand rupees) in the previous year:
10,12,24,23,11,14,15,34,16,23
Construct a 95% confidence interval to estimate the average telephone expenses of the employees in the
population.

Example 11
A research company conducted a survey on 300 randomly selected tax payers. It found that out of 300 tax payers,
180 tax payers have filled the “SARAL” form correctly. Construct a 95% confidence interval to estimate the
percentage of tax payers who have filled the form correctly in the population.

Example 12
A population has a standard deviation of 4.2 and sampling error of 2.4. Determine the sample size to estimate the
mean of the population with 95% confidence level?

Example 13
A consumer electronics company wants to determine the job satisfaction levels of its employees. For this, they ask
a simple question, are you satisfied with your job? It was estimated before the study that no more than 30% of the
employees would answer yes. What should be the sample size for this company to estimate population proportion
to ensure 95% confidence level in result, and to be within 0.04 of the true population proportion?

Example 14
A multinational company sells through small retail shops. The company has taken a random sample of 75 retail
shops. The average sales per day from the sampled shops are computed as Rs. 5000. The population standard
deviation is estimated as Rs. 1000. Construct a 90% confidence interval to estimate the mean for the population.

Example 15
A mineral company has launched a new 10 litres bottle in the urban market. After sometimes, the firm receives
some complaints that the bottles do not contain exactly 10 litres. For verifying this complaint, the company’s
investigating team has taken a random sample of 120 bottles from different places. The sample mean is computed
as 9.5 and the sample standard deviation is computed as 1.1. Construct a 95% confidence interval to estimate the
mean for the population.

Example 16
A distemper manufacturing company has launched a 2 kg bag in the market and decided to price this bag at Rs.
100. The price of this bag varies from town to town. The company researches have taken a random sample from 40
shops located in different towns. The price collected from 40 shops is given in Table . Construct a 99% confidence
interval to estimate the mean for the population.

Example 17
A company receives copper plates from a vendor to use as an important part of its machinery. The company had
specified that the diameter of the copper plates must be 20 millimeters. Production department of the company
has observed that a few of the supplied plates do not meet the specifications. For verifying this, the company
researches have taken a random sample of 20 plates. Assuming that the diameters of these plates are normally
distributed, construct a 95% confidence interval for estimating the population mean diameter. Diameter of 20
randomly sampled plates is given in table .

Example 18
The quality control department of an electric bulb manufacturing company wants to estimate the average life of
the electric bulbs. For this, a quality control inspector has taken a random sample of 20 bulbs. Life of these bulbs in
hours is given in Table . Assuming that the life of the bulb is normally distributed, construct a 90% confidence
interval for estimating the population mean.

Example 19
The organized sector has a 70% market share in the storage batteries segment in India. Suppose a researcher
wants to check this market share. For this purpose, the researcher has taken a random sample of 120 customers of
storage batteries. Out of 120 customers, 86 customers have purchased from the organized market. Assuming
customers to be normally distributed, construct a 95% confidence interval for estimating the population
proportion.

Example 20
The footwear market in India can be divided into three categories: leather products, rubber/PVC products, and
canvas products. Market share for leather products is 10%. Suppose a footwear company wants to launch a new
expensive product. The company management has decided that it will launch this product only when there is an
increase in the market shares of leather products. Company researchers have taken a random sample of 200
customers and found that 28 customers have purchased leather products. Assuming customers to be normally
distributed, construct a 90% confidence interval for estimating population proportion.