SECTION A

Attempt all questions in this Section.

Q1

(a)

A market survey required respondents to indicate their top ten

chocolate bars in order of preference. This data is measured on a
nominal, ordinal, interval or ratio scale? Is it qualitative or
quantitative?
(3 marks)

(b)

A sample of 10 people was asked how many minutes they had spent on
the internet that day. The answers were
30, 35, 40, 45, 50, 55, 55, 65, 70, 75
Write down:
(i)

the mean

(ii)

the mode

(iii)

the median

(iv)

the range
(6 marks)

(c)

Between 2 variables, what can be inferred about the correlation and

relationship if the value of r is -0.1?
(3 marks)

(d)

In a linear regression analysis where time taken to complete a loading

job was the dependant variable and the weight of the load was the
independent variable, it was calculated that the y intercept of the
regression line was 150 and the slope was 10.50. Weight is in tonnes
and time in minutes. If a load weighed 22 tonnes then what would the
equation estimate the time to be?
(3 marks)

(e)

20% of new product ideas pass the feasibility study stage. Of these
40% will pass the market test stage, and 30% of these will eventually
become successful new products. What is the probability of a new
product idea passing the feasibility and market test stages but failing to
become a successful product?
(3 marks)

(f)

The probability that an item is defective is 0.05. A typical customer

order contains a large batch of these items. On receipt of the order the
customer chooses a sample of 12 items at random. If more than one
item in the sample is faulty the entire batch is rejected.

Calculate the probability that:

(i)

None of the items in the sample is defective.

(ii)

One item in the sample is defective

(2 marks)
(3 marks)
(iii)

A batch is rejected.
(1 marks)

(g)

Find the area under the standard normal curve of the following:
(i)

less than z = 1.5

(2 marks)

(ii)

less than z = -2.2

(iii)

between z = 1.5 and z = -2.8

(1 marks)
(3 marks)

SECTION B
Attempt all questions in this Section.

Q2

The delivery times for the most recent 50 orders received from a supplier are
tabulated below:

(a)

(b)
(c)

Delivery time in days

Number of deliveries

1 and under 5

5 and under 9

13

9 and under 13

16

13 and under 17

12

17 and under 21

Calculate the arithmetic mean and the standard deviation (to 2 d.p.)
clearly showing calculations.
(8 marks)
Construct a histogram.
(6 marks)
The ogive for the above distribution is reproduced below. Using this
curve estimate:
(i)

The median

(ii)

The quartiles

(iii)

The interquartile range.

(4 marks)

(d)

Find the coefficient of variation

(2 marks)

Q3

A manufacturing company delivers orders to local businesses. The distance

travelled in each round trip and the time taken, including unloading time, is
recorded.
Dist travelled miles) x

10

11

14

19

20

22

26

28

Time taken (mins) y

44

45

46

56

69

70

84

83

The following have been calculated x2 = 3122, y2 = 32819, xy = 10071

(a)

Calculate the equation of the least squares regression line of y on x

giving the coefficients correct to 2 decimal places.
(6 marks)

(b)

From the equation of the regression line, find the average time for the
orders to be unloaded
(2 marks)

(c)

Draw a scatterplot for the above data, and draw in your regression line.
(6 marks)

(d)

Calculate the product moment correlation coefficient correct to 2

decimal places.
(6 marks)

Q4.

(a)

After reviewing company promotional records, a welfare officer found

that, of a total staff of 1200, 240 were women. 324 staff had been
promoted to higher grades, 36 of whom were women. The welfare
officer is interested in the relationship between promotion and an
employees sex. Present the above data in the form of a two way
contingency table.
(6 marks)

(b)

Recently the US motor industry complained about the amount of

competition from non US firms. The ownership of US and non US
cars in a sample of 200 US families is shown in the following table.
Owns a US Car
Owns a non US car Yes

No

Total

Yes

30

10

40

No

150

10

160

Total

180

20

200

Answer the following questions relating to this table:

(i)

(ii)

(iii)

What is the probability that a family will own both a US car

and a non US car?
(2 marks)
Use the marginal probabilities to compare US and non US car
ownership.
(2 marks)
What is the probability a family owns a car?
(2 marks)

(iv)

If a family owns a US car, what is the probability that it also

owns a non US car?
(2 marks)

(v)

If a family owns a non US car, what is the probability that it

also owns a US car?
(2 marks)

(vi)

Are US car and non US car ownership independent? Explain

your answer.
(4 marks)

Q5.

(a)

Metal rods are machined to a desired length of 15 cm. In fact the

actual length of the rods follows a normal distribution with a mean of
15 cms and a standard deviation of 0.2 cm. Rods are considered to be
produced to specification if their length is between 14.8 and 15.3 cm.
The rods cost 4 to manufacture, and are sold for 6 each if their
length is within specification. If their length is greater than 15.3 cms
they can be shortened at a cost of 1 each and sold as normal. If they
are less than 14.8 cms they are sold as scrap at 3 each.
(i)

What proportion of the rods are sold as scrap?

(3 marks)

(b)

(ii)

What proportion of the rods will require to be shortened?

(3 marks)

(iii)

The firm do not want more than 5% of the rods to be scrapped.

Assuming that the standard deviation is to remain at 0.2 cm,
what mean length should the rods be machined to in order to
achieve this aim?
(6 marks)

Six candidates are interviewed for a job at the company. Based on past
experience any candidate has a two thirds chance of passing to a
second interview.
(i)

What is the probability that all candidates pass to a second

interview
(2 marks)

(ii)

What is the probability that exactly five pass to a second

interview
(2 marks)

(iii)

What is the probability that less than four pass to a second

interview.
(4 marks)

SECTION C
Attempt the question in this Section.
Q6
Decision Analysis - JAMES DRINKWATER
James Drinkwater is an aspiring artist whose forte is wood sculpting. He is in receipt
of a grant from the national lottery, which he must use to rent premises and purchase
equipment and materials. Since he is unknown to the discerning public, James is
concerned that he rents premises that will enable him to display his work to maximum
advantage and attract a sufficient volume of potential clients.
He has narrowed down his search for premises to just three possibilities:
(i)

the Museum of Welsh Life at St Fagans

(ii)

the Heritage Park in the Rhondda

(iii)

Mermaid Quay in Cardiff Bay.

James would quite like to rent premises in Cardiff Bay, but the snag is that the rental
outlay would be somewhat higher than for the other two locations. He has to balance
the potential advantage to be gained from a particular location, against the costs that
will be incurred.
Luckily James' close friend Mervyn Le Sage has acquired sufficient accountancy
skills to convince the Institute of Chartered Accountants that he is a fit and proper
person to be a member. Between the two of them, they have come up with a set of
estimated annual net earnings, dependent upon the premises leased and the number of
potential clients that visit. They have supposed three possibilities for the number of
potential clients, namely that it is good, adequate or poor. The figures (in s) that they
have arrived at are given in the table below.

Museum of Welsh Life

Heritage Park
Cardiff Bay

Number of Potential Clients

Good Adequate Poor
28000
18000
2000
25000
17000
10000
35000
15000
-2000

For example, if the premises at the Museum of Welsh Life are chosen and the number
of visiting potential clients turns out to be good, the estimated earnings for the year
are 28,000. However, if the number of potential clients turns out to be poor and the
Cardiff Bay premises have been rented, the estimated annual earnings are for a loss of
2,000.
At present the lottery grant is for one year only. Also neither James, nor his friend
Mervyn, feel able to assign any probabilities to the three possibilities for the number

of potential clients. Nevertheless this is not an opportunity to be missed and James

must make an immediate decision as to which of the three choices he should rent.
(a)

(b)

What would you recommend, using the decision criteria of:

(i)

Maximin

(ii)

Maximax

(iii)

Minimax Regret.

James has now been informed that the lottery grant is for a period of 10 years
and not just for a single year. This casts a totally different perspective upon his
decision problem, since he must now decide which of the three premises he
should rent for the full 10 year period.
James has also been visiting a number of other wood sculptors scattered
throughout South Wales, to see if he could obtain information as to the likely
annual number of potential clients he might expect. It seems that annual visitor
figures vary substantially from year to year. The best he has been able to do is
come up with the following probabilities for the annual number of potential
clients being good, adequate or poor.
Annual Number
of
Probability
Potential Clients
Good
0.5
Adequate
0.3
Poor
0.2
Calculate the expected monetary value for each choice of location. So which
do you recommend James to rent? Why is use of the expected value approach
to decision making appropriate in this context?

(c)
Show that minimising expected opportunity loss leads to the same choice of
location.
(d)

James has now had some more good news. He has been told that the South
Wales correspondent of "The Woodworker", the leading UK journal for wood
sculpturing, has an excellent track record in predicting the annual number of
potential clients likely to visit any particular wood sculptor in South Wales.
On the assumption that his predictions are fully correct, up to what amount per
year should James be prepared to pay to acquire his services? You should
assume that James is able to make annual changes to the premises rented, at no
extra cost.

Z
0.00
0.01
0.02
0.03
0.04
0.05
0.06
0.07
0.08
0.09
0.10
0.11
0.12
0.13
0.14
0.15
0.16
0.17
0.18
0.19
0.20
0.21
0.22
0.23
0.24
0.25
0.26
0.27
0.28
0.29
0.30
0.31
0.32
0.33
0.34
0.35
0.36
0.37
0.38
0.39
0.40
0.41
0.42
0.43
0.44
0.45
0.46
0.47
0.48
0.49

Area
Between
Mean and
Z
0.00000
0.00399
0.00798
0.01197
0.01595
0.01994
0.02392
0.02790
0.03188
0.03586
0.03983
0.04380
0.04776
0.05172
0.05567
0.05962
0.06356
0.06749
0.07142
0.07535
0.07926
0.08317
0.08706
0.09095
0.09483
0.09871
0.10257
0.10642
0.11026
0.11409
0.11791
0.12172
0.12552
0.12930
0.13307
0.13683
0.14058
0.14431
0.14803
0.15173
0.15542
0.15910
0.16276
0.16640
0.17003
0.17364
0.17724
0.18082
0.18439
0.18793

Area
Beyond
Z
0.50000
0.49601
0.49202
0.48803
0.48405
0.48006
0.47608
0.47210
0.46812
0.46414
0.46017
0.45620
0.45224
0.44828
0.44433
0.44038
0.43644
0.43251
0.42858
0.42465
0.42074
0.41683
0.41294
0.40905
0.40517
0.40129
0.39743
0.39358
0.38974
0.38591
0.38209
0.37828
0.37448
0.37070
0.36693
0.36317
0.35942
0.35569
0.35197
0.34827
0.34458
0.34090
0.33724
0.33360
0.32997
0.32636
0.32276
0.31918
0.31561
0.31207

Z
0.50
0.51
0.52
0.53
0.54
0.55
0.56
0.57
0.58
0.59
0.60
0.61
0.62
0.63
0.64
0.65
0.66
0.67
0.68
0.69
0.70
0.71
0.72
0.73
0.74
0.75
0.76
0.77
0.78
0.79
0.80
0.81
0.82
0.83
0.84
0.85
0.86
0.87
0.88
0.89
0.90
0.91
0.92
0.93
0.94
0.95
0.96
0.97
0.98
0.99

Area
Between
Mean and
Z
0.19146
0.19497
0.19847
0.20194
0.20540
0.20884
0.21226
0.21566
0.21904
0.22240
0.22575
0.22907
0.23237
0.23565
0.23891
0.24215
0.24537
0.24857
0.25175
0.25490
0.25804
0.26115
0.26424
0.26730
0.27035
0.27337
0.27637
0.27935
0.28230
0.28524
0.28814
0.29103
0.29389
0.29673
0.29955
0.30234
0.30511
0.30785
0.31057
0.31327
0.31594
0.31859
0.32121
0.32381
0.32639
0.32894
0.33147
0.33398
0.33646
0.33891

Area
Beyond
Z
0.30854
0.30503
0.30153
0.29806
0.29460
0.29116
0.28774
0.28434
0.28096
0.27760
0.27425
0.27093
0.26763
0.26435
0.26109
0.25785
0.25463
0.25143
0.24825
0.24510
0.24196
0.23885
0.23576
0.23270
0.22965
0.22663
0.22363
0.22065
0.21770
0.21476
0.21186
0.20897
0.20611
0.20327
0.20045
0.19766
0.19489
0.19215
0.18943
0.18673
0.18406
0.18141
0.17879
0.17619
0.17361
0.17106
0.16853
0.16602
0.16354
0.16109

Z
1.00
1.01
1.02
1.03
1.04
1.05
1.06
1.07
1.08
1.09
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19
1.20
1.21
1.22
1.23
1.24
1.25
1.26
1.27
1.28
1.29
1.30
1.31
1.32
1.33
1.34
1.35
1.36
1.37
1.38
1.39
1.40
1.41
1.42
1.43
1.44
1.45
1.46
1.47
1.48
1.49

Area
Between
Mean and
Z
0.34134
0.34375
0.34614
0.34849
0.35083
0.35314
0.35543
0.35769
0.35993
0.36214
0.36433
0.36650
0.36864
0.37076
0.37286
0.37493
0.37698
0.37900
0.38100
0.38298
0.38493
0.38686
0.38877
0.39065
0.39251
0.39435
0.39617
0.39796
0.39973
0.40147
0.40320
0.40490
0.40658
0.40824
0.40988
0.41149
0.41308
0.41466
0.41621
0.41774
0.41924
0.42073
0.42220
0.42364
0.42507
0.42647
0.42785
0.42922
0.43056
0.43189

Area
Beyond
Z
0.15866
0.15625
0.15386
0.15151
0.14917
0.14686
0.14457
0.14231
0.14007
0.13786
0.13567
0.13350
0.13136
0.12924
0.12714
0.12507
0.12302
0.12100
0.11900
0.11702
0.11507
0.11314
0.11123
0.10935
0.10749
0.10565
0.10383
0.10204
0.10027
0.09853
0.09680
0.09510
0.09342
0.09176
0.09012
0.08851
0.08692
0.08534
0.08379
0.08226
0.08076
0.07927
0.07780
0.07636
0.07493
0.07353
0.07215
0.07078
0.06944
0.06811

Z
1.50
1.51
1.52
1.53
1.54
1.55
1.56
1.57
1.58
1.59
1.60
1.61
1.62
1.63
1.64
1.65
1.66
1.67
1.68
1.69
1.70
1.71
1.72
1.73
1.74
1.75
1.76
1.77
1.78
1.79
1.80
1.81
1.82
1.83
1.84
1.85
1.86
1.87
1.88
1.89
1.90
1.91
1.92
1.93
1.94
1.95
1.96
1.97
1.98
1.99

Area
Between
Mean and
Z
0.43319
0.43448
0.43574
0.43699
0.43822
0.43943
0.44062
0.44179
0.44295
0.44408
0.44520
0.44630
0.44738
0.44845
0.44950
0.45053
0.45154
0.45254
0.45352
0.45449
0.45543
0.45637
0.45728
0.45818
0.45907
0.45994
0.46080
0.46164
0.46246
0.46327
0.46407
0.46485
0.46562
0.46638
0.46712
0.46784
0.46856
0.46926
0.46995
0.47062
0.47128
0.47193
0.47257
0.47320
0.47381
0.47441
0.47500
0.47558
0.47615
0.47670

Area
Beyond
Z
0.06681
0.06552
0.06426
0.06301
0.06178
0.06057
0.05938
0.05821
0.05705
0.05592
0.05480
0.05370
0.05262
0.05155
0.05050
0.04947
0.04846
0.04746
0.04648
0.04551
0.04457
0.04363
0.04272
0.04182
0.04093
0.04006
0.03920
0.03836
0.03754
0.03673
0.03593
0.03515
0.03438
0.03362
0.03288
0.03216
0.03144
0.03074
0.03005
0.02938
0.02872
0.02807
0.02743
0.02680
0.02619
0.02559
0.02500
0.02442
0.02385
0.02330

Z
2.00
2.01
2.02
2.03
2.04
2.05
2.06
2.07
2.08
2.09
2.10
2.11
2.12
2.13
2.14
2.15
2.16
2.17
2.18
2.19
2.20
2.21
2.22
2.23
2.24
2.25
2.26
2.27
2.28
2.29
2.30
2.31
2.32
2.33
2.34
2.35
2.36
2.37
2.38
2.39
2.40
2.41
2.42
2.43
2.44
2.45
2.46
2.47
2.48
2.49

Area
Between
Mean and
Z
0.47725
0.47778
0.47831
0.47882
0.47932
0.47982
0.48030
0.48077
0.48124
0.48169
0.48214
0.48257
0.48300
0.48341
0.48382
0.48422
0.48461
0.48500
0.48537
0.48574
0.48610
0.48645
0.48679
0.48713
0.48745
0.48778
0.48809
0.48840
0.48870
0.48899
0.48928
0.48956
0.48983
0.49010
0.49036
0.49061
0.49086
0.49111
0.49134
0.49158
0.49180
0.49202
0.49224
0.49245
0.49266
0.49286
0.49305
0.49324
0.49343
0.49361

Area
Beyond
Z
0.02275
0.02222
0.02169
0.02118
0.02068
0.02018
0.01970
0.01923
0.01876
0.01831
0.01786
0.01743
0.01700
0.01659
0.01618
0.01578
0.01539
0.01500
0.01463
0.01426
0.01390
0.01355
0.01321
0.01287
0.01255
0.01222
0.01191
0.01160
0.01130
0.01101
0.01072
0.01044
0.01017
0.00990
0.00964
0.00939
0.00914
0.00889
0.00866
0.00842
0.00820
0.00798
0.00776
0.00755
0.00734
0.00714
0.00695
0.00676
0.00657
0.00639

Z
2.50
2.51
2.52
2.53
2.54
2.55
2.56
2.57
2.58
2.59
2.60
2.61
2.62
2.63
2.64
2.65
2.66
2.67
2.68
2.69
2.70
2.71
2.72
2.73
2.74
2.75
2.76
2.77
2.78
2.79
2.80
2.81
2.82
2.83
2.84
2.85
2.86
2.87
2.88
2.89
2.90
2.91
2.92
2.93
2.94
2.95
2.96
2.97
2.98
2.99

Area
Between
Mean and
Z
0.49379
0.49396
0.49413
0.49430
0.49446
0.49461
0.49477
0.49492
0.49506
0.49520
0.49534
0.49547
0.49560
0.49573
0.49585
0.49598
0.49609
0.49621
0.49632
0.49643
0.49653
0.49664
0.49674
0.49683
0.49693
0.49702
0.49711
0.49720
0.49728
0.49736
0.49744
0.49752
0.49760
0.49767
0.49774
0.49781
0.49788
0.49795
0.49801
0.49807
0.49813
0.49819
0.49825
0.49831
0.49836
0.49841
0.49846
0.49851
0.49856
0.49861

Area
Beyond
Z
0.00621
0.00604
0.00587
0.00570
0.00554
0.00539
0.00523
0.00508
0.00494
0.00480
0.00466
0.00453
0.00440
0.00427
0.00415
0.00402
0.00391
0.00379
0.00368
0.00357
0.00347
0.00336
0.00326
0.00317
0.00307
0.00298
0.00289
0.00280
0.00272
0.00264
0.00256
0.00248
0.00240
0.00233
0.00226
0.00219
0.00212
0.00205
0.00199
0.00193
0.00187
0.00181
0.00175
0.00169
0.00164
0.00159
0.00154
0.00149
0.00144
0.00139

Z
3.00
3.01
3.02
3.03
3.04
3.05
3.06
3.07
3.08
3.09
3.10
3.11
3.12
3.13
3.14
3.15
3.16
3.17
3.18
3.19
3.20
3.21
3.22
3.23
3.24
3.25
3.26
3.27
3.28
3.29
3.30
3.31
3.32
3.33
3.34
3.35
3.36
3.37
3.38
3.39
3.40
3.41
3.42
3.43
3.44
3.45
3.46
3.47
3.48
3.49

Area
Between
Mean and
Z
0.49865
0.49869
0.49874
0.49878
0.49882
0.49886
0.49889
0.49893
0.49896
0.49900
0.49903
0.49906
0.49910
0.49913
0.49916
0.49918
0.49921
0.49924
0.49926
0.49929
0.49931
0.49934
0.49936
0.49938
0.49940
0.49942
0.49944
0.49946
0.49948
0.49950
0.49952
0.49953
0.49955
0.49957
0.49958
0.49960
0.49961
0.49962
0.49964
0.49965
0.49966
0.49968
0.49969
0.49970
0.49971
0.49972
0.49973
0.49974
0.49975
0.49976

Area
Beyond
Z
0.00135
0.00131
0.00126
0.00122
0.00118
0.00114
0.00111
0.00107
0.00104
0.00100
0.00097
0.00094
0.00090
0.00087
0.00084
0.00082
0.00079
0.00076
0.00074
0.00071
0.00069
0.00066
0.00064
0.00062
0.00060
0.00058
0.00056
0.00054
0.00052
0.00050
0.00048
0.00047
0.00045
0.00043
0.00042
0.00040
0.00039
0.00038
0.00036
0.00035
0.00034
0.00032
0.00031
0.00030
0.00029
0.00028
0.00027
0.00026
0.00025
0.00024

Z
3.50
3.51
3.52
3.53
3.54
3.55
3.56
3.57
3.58
3.59
3.60
3.61
3.62
3.63
3.64
3.65
3.66
3.67
3.68
3.69
3.70
3.71
3.72
3.73
3.74
3.75
3.76
3.77
3.78
3.79
3.80
3.81
3.82
3.83
3.84
3.85
3.86
3.87
3.88
3.89
3.90
3.91
3.92
3.93
3.94
3.95
3.96
3.97
3.98
3.99

Area
Between
Mean and
Z
0.49977
0.49978
0.49978
0.49979
0.49980
0.49981
0.49981
0.49982
0.49983
0.49983
0.49984
0.49985
0.49985
0.49986
0.49986
0.49987
0.49987
0.49988
0.49988
0.49989
0.49989
0.49990
0.49990
0.49990
0.49991
0.49991
0.49992
0.49992
0.49992
0.49992
0.49993
0.49993
0.49993
0.49994
0.49994
0.49994
0.49994
0.49995
0.49995
0.49995
0.49995
0.49995
0.49996
0.49996
0.49996
0.49996
0.49996
0.49996
0.49997
0.49997

Area
Beyond
Z
0.00023
0.00022
0.00022
0.00021
0.00020
0.00019
0.00019
0.00018
0.00017
0.00017
0.00016
0.00015
0.00015
0.00014
0.00014
0.00013
0.00013
0.00012
0.00012
0.00011
0.00011
0.00010
0.00010
0.00010
0.00009
0.00009
0.00008
0.00008
0.00008
0.00008
0.00007
0.00007
0.00007
0.00006
0.00006
0.00006
0.00006
0.00005
0.00005
0.00005
0.00005
0.00005
0.00004
0.00004
0.00004
0.00004
0.00004
0.00004
0.00003
0.00003

FORMULAE
1.

Arithmetic Mean
Ungrouped Data:

1
X
N

1
N

Grouped Data:

2.

fX

Variance
Population Variance:
Ungrouped Data:

1
X
N

or alternatively
1
N

Grouped Data:

f X

or alternatively
1
N

fX

Sample Variance:
NB calculate as if for a population variance and then multiply by the factor N/(N
-1) as below

N 1

3.

Standard Deviation
The Standard Deviation ( or s) is the square root of the variance

4.

Coefficient of Variation
CoVar

5.

Z - Score

Z
6.

x100

Binomial Distribution
A variable X distributed binomially has
Mean, = Np and Variance, 2 = Np(1 - p)

N
Pr( X x ) px (1 p) N x
x

N
N!
where N Cx
x
( N x )!* x!

and
7.

N! = N * (N - 1) * (N - 2).... * 3 * 2 * 1

Standard Error of Sample Mean

For large samples:

X is normally distributed, Standard Error =

8.

Standard Error of Sample Proportion

p is the sample proportion, is the population proportion
for large samples p is normally distributed, Standard Error = [(1 )
/ N]

If we do not know the population proportion then:

Standard error = [p(1 p) / N]

9.

Product Moment Coefficient of Correlation.

10.

2
X

XY

X Y

X
N

N
2

2
. Y

Y
N

Two Variable Linear Regression

For the Linear Equation Y = a + bX
b

XY X Y
X X X
2

a Y bX
NB
11.

X = mean of X, Y = mean of Y

Normal Distribution
- to + includes at least 68% of values
- 2 to + 2 includes at least 95% of values
- 3 to + 3 includes almost all of the data

12.

Addition Rule of Probability

Pr(AB) = Pr(A) + Pr(B) - Pr(AB)

13.

Multiplication Rule of Probability

Pr(AB) = Pr(A) x Pr(B|A)
= Pr(B) x Pr(A|B)

14.

Permutations
N

Px

N!
( N x )!