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Category: Management
Claims arrive at random times to an insurance company. The daily amount of claims is normally distributed with mean $1570 and standard deviation $450. Total claims on different days each have this distribution, and they are probabilistically independent of one another. a. Find the probability that the amount of total claims over a period of 100 day...
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Category: Management
A company assembles a large part by joining two smaller parts together. Assume that the smaller parts are normally distributed with a mean length of 1 inch and a standard deviation of 0.01 inch. a. What fraction of the larger parts are longer than 2.05 inches? b. What fraction of the larger parts are between 1.96 inches and 2.02 inches long?
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Category: Management
The weekly demand for TVs at Lowland Appliance is normally distributed with mean 400 and standard deviation 100. Each time an order for TVs is placed, it arrives exactly four weeks later. That is, TV orders have a four week lead time. Lowland doesn't want to run out of TVs during any more than 1% of all lead times. How low should Lowland let its TV...
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Category: Management
Suppose that if a presidential election were held today, 53% of all voters would vote for candidate Smith over candidate Jones. (You can substitute the names of the most recent presidential candidates.) This problem shows that even if there are 100 million voters, a sample of several thousand is enough to determine the outcome, even in a fairly clo...
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Category: Management
Many companies use sampling to determine whether a batch should be accepted. An (n, c) sampling plan consists of inspecting n randomly chosen items from a batch and accepting the batch if c or fewer sampled items are defective. Suppose a company uses a (100, 5) sampling plan to determine whether a batch of 10,000 computer chips is acceptable. a. Th...
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