MARKETING INSTITUTE OF SINGAPORE

BUSINESS STATISTICS 101

Tutorial Assignment 2

1. A silversmith produces 6 kg boxes of silver cutlery and believes there is a thief in

the organisation. It is believed the standard deviation of all boxes of silver cutlery
is 0.5 kg.

a) Test the silversmith’s belief at the 1% level of significance if a sample of

100 boxes is weighed and the average weight turns out to be 5.9 kg.

b) Why would a significance level of 1% be more suitable than a level of 5%

(the business default value) in this instance?

2. A random sample of 250 people with telephones installed in their homes

included 80 who had numbers unlisted in the telephone directory. Estimate the
percentage of people with listed domestic telephone numbers using a 97%
level of confidence.

3. On an elementary school examination in spelling the mean grade of 100 boys (μ1)
was 72 with a standard deviation of 8, while the mean grade of 50 girls (μ2) was
75 with a standard deviation of 6. Previous results showed that the mean grade of
boys is lesser than the mean grade of girls. Test 99.5% level of confidence basis
this claim.

4. A factory works 4 shifts every day (24 hours a days). The Safety Officer looked
at records of the last 60 recorded accidents and found that 15 occurred on Shift 1,
25 on Shift 2, 12 on Shift 3 and 8 on shift 4. Is there a significant difference at the
1% level of significance between the four shifts?

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5. Tutorial 10 (Q4), pg 249

A researcher wants to develop a regression model to predict savings (in thousands

of dollars) within a community. Income (in thousands of dollars) is to be used as
an independent variable. Data from ten families was used to build the model.

Coefficient of correlation (r) = 0.908

Standard error of estimation (se) = 0.33056

a) What does the coefficient of determination tell you about the model?

The table of coefficients is as follows:

Coefficient Standard Error t statistic p-value

Intercept 0.2025 0.1967 0.51 0.623

Income 0.0931 0.0184 5.05 0.000

b) Write down the regression equation

c) Interpret the coefficient of ‘income’

d) Is ‘income’ contributing to the prediction of ‘savings’? Another way of

expressing this is: ‘Is ‘income’ a good predictor of ‘savings’.

The ANOVA table is as follows:

Source Df SS MS F Significance F*
_________________________________________________________
Regression 25.48 0.000
Error

e) Is the model useful in predicting ‘savings’?

* Significance F = p-value of the F test

Due Date : 23rd Jan 2008

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