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Q:
At gambling casinos all over the country, a popular dice game is called craps. The probability of a player winning at this game can be assessed using:
A) subjective assessment.
B) classical probability.
C) relative frequency of occurrence.
D) None of the above
Q:
The method of probability assessment that is least likely to be used by business decision makers is:
A) subjective assessment.
B) relative frequency of occurrence.
C) classical assessment.
D) None of the above is used by decision makers.
Q:
The method of probability assessment that relies on an examination of historical data from similar situations is:
A) relative frequency of occurrence.
B) classical assessment.
C) historical assessment.
D) subjective assessment.
Q:
An event is:
A) the list of possible outcomes that can occur from a selection or decision.
B) a collection of elementary events.
C) similar to an experiment but not controlled by the decision maker.
D) more frequently found in business than in other disciplines.
Q:
If a six-sided die is tossed two times and "4" shows up both times, the probability of "4" on the third trial is much larger than any other outcome.
Q:
The Baker Oil and Gas Company has four retail locations, code-named A, B, C, and D. The following table illustrates the percentage of total company sales at each store and also the percentage of customers at that store who make purchases with debit cards: Store
Proportion of Total Sales
Proportion of Customers Using Debit A
0.18
0.32 B
0.30
0.19 C
0.41
0.18 D
0.11
0.40 Based on this information, the probability that a customer who used a debit card shopped at store C is 0.0738.
Q:
The Baker Oil and Gas Company has four retail locations, code-named A, B, C, and D. The following table illustrates the percentage of total company sales at each store and also the percentage of customers at that store who make purchases with debit cards: Store
Proportion of Total Sales
Proportion of Customers Using Debit A
0.18
0.32 B
0.30
0.19 C
0.41
0.18 D
0.11
0.40 Based on this information, given that a customer has used a debit card to make the purchase, the sale was most likely made at store D.
Q:
The Baker Oil and Gas Company has four retail locations, code-named A, B, C, and D. The following table illustrates the percentage of total company sales at each store and also the percentage of customers at that store who make purchases with debit cards: Store
Proportion of Total Sales
Proportion of Customers Using Debit A
0.18
0.32 B
0.30
0.19 C
0.41
0.18 D
0.11
0.40 Based on this information, the probability that a customer will use a debit card is just slightly greater than 0.23.
Q:
The Crystal Window Company makes windows at three locations: Reno, Las Vegas, and Boise. Some windows made by the company contain a visible defect and must be replaced. Each defect costs the company $45.00. The Reno plant makes 40 percent of all windows while the Las Vegas and Boise plants split the remaining production evenly. A recent quality study shows that 8 percent of the Reno windows contain a defect, 11 percent of the Las Vegas windows contain a defect, while 4 percent of the windows made in Boise have a defect. Once the windows are made, they are shipped to a central warehouse where they are commingled and the location where they were made is lost.
Based on this information, the percentage of the defective cost that should be allocated to the Reno plant is approximately 42 percent.
Q:
The Crystal Window Company makes windows at three locations: Reno, Las Vegas, and Boise. Some windows made by the company contain a visible defect and must be replaced. Each defect costs the company $45.00. The Reno plant makes 40 percent of all windows while the Las Vegas and Boise plants split the remaining production evenly. A recent quality study shows that 8 percent of the Reno windows contain a defect, 11 percent of the Las Vegas windows contain a defect, while 4 percent of the windows made in Boise have a defect. Once the windows are made, they are shipped to a central warehouse where they are commingled and the location where they were made is lost.
Based on this information the probability that a defective window was made by the Boise plant is approximately 0.16.
Q:
The Crystal Window Company makes windows at three locations: Reno, Las Vegas, and Boise. Some windows made by the company contain a visible defect and must be replaced. Each defect costs the company $45.00. The Reno plant makes 40 percent of all windows while the Las Vegas and Boise plants split the remaining production evenly. A recent quality study shows that 8 percent of the Reno windows contain a defect, 11 percent of the Las Vegas windows contain a defect, while 4 percent of the windows made in Boise have a defect. Once the windows are made, they are shipped to a central warehouse where they are commingled and the location where they were made is lost.
Based on this information, if a defective window is discovered, it was most likely made by the Las Vegas plant.
Q:
Assume P(A) = 0.6, P(B) = 0.7, and P(A and B) = 0.42, which means that events A and B are independent of each other.
Q:
There are three general locations that a taxi can go to: the airport, downtown, and elsewhere. When a taxi driver starts in the downtown location, there is a 0.40 chance that his first call will take him to the airport and a 0.40 chance of going to another downtown location. Once a taxi is at the airport, there is a 0.80 probability that the next fare will take him downtown and a 0.20 chance of going elsewhere. The probability of a call from anywhere except downtown taking him to the airport is 0.20. Therefore, the probability that the taxi is at the airport when the third call arrives after going on shift is 0.20.
Q:
When customers come to a bank, there are three primary locations they may select to go to: teller, loan officer, or escrow department. Based on past experience, the following probability distribution applies: Location
Probability Teller
0.60 Loan Officer
0.30 Escrow
0.10 Seventy percent of customers are males. The probability that the next customer will be male and will go to either the teller or the escrow department is 0.49.
Q:
When customers come to a bank, there are three primary locations they may select to go to: teller, loan officer, or escrow department. Based on past experience, the following probability distribution applies: Location
Probability Teller
0.60 Loan Officer
0.30 Escrow
0.10 Seventy percent of customers are males. The probability that three consecutive customers all go to a teller is approximately 0.22.
Q:
When customers come to a bank, there are three primary locations they may select to go to: teller, loan officer, or escrow department. Based on past experience, the following probability distribution applies: Location
Probability Teller
0.60 Loan Officer
0.30 Escrow
0.10 Seventy percent of customers are males. The probability that the next two customers to enter the bank are males and go to the Loan Officer is 0.42.
Q:
When customers come to a bank, there are three primary locations they may select to go to: teller, loan officer, or escrow department. Based on past experience, the following probability distribution applies: Location
Probability Teller
0.60 Loan Officer
0.30 Escrow
0.10 Seventy percent of customers are males. Thus, the probability that the next customer to enter the bank is a male who goes to the teller is 1.30.
Q:
The following probability distribution was subjectively assessed for the number of sales a salesperson would make if he or she made five sales calls in one day. Sales
Probability 0
0.10 1
0.15 2
0.20 3
0.30 4
0.20 5
0.05 When the salesperson makes a sale, there are three possible sales levels: large, medium, and small. The probability of a large sale is 0.20 and the chance of a medium sale is 0.60. The probability on a given day that the salesperson will make one sale and that it is medium is 0.09.
Q:
When the salesperson makes a sale, there are three possible sales levels: large, medium, and small. The probability of a large sale is 0.20 and the chance of a medium sale is 0.60. If a salesperson makes two sales, the probability that at least one is large is 0.36.
Q:
Assume P(A) = 0.4 and P(B) = 0.2 and P(A and B) = 0.1, then the probability of P(A or B) = 0.7.
Q:
When the salesperson makes a sale, there are three possible sales levels: large, medium, and small. The probability of a large sale is 0.20 and the chance of a medium sale is 0.60. Thus, when a sale is made, the chance of it being a small sale is 0.20.
Q:
The following probability distribution was subjectively assessed for the number of sales a salesperson would make if he or she made five sales calls in one day. Sales
Probability 0
0.10 1
0.15 2
0.20 3
0.30 4
0.20 5
0.05 Given this distribution, the probability that the number of sales is more than 2 is 0.80.
Q:
The following probability distribution was subjectively assessed for the number of sales a salesperson would make if he or she made five sales calls in one day. Sales
Probability 0
0.10 1
0.15 2
0.20 3
0.30 4
0.20 5
0.05 Given this distribution, the probability that the number of sales is 2 or 3 is 0.50.
Q:
The following probability distribution was subjectively assessed for the number of sales a salesperson would make if he or she made five sales calls in one day. Sales
Probability 0
0.10 1
0.15 2
0.20 3
0.30 4
0.20 5
0.05 Given this distribution, the probability that the number of sales is less than 2 is 0.15.
Q:
Suppose 10 students are enrolled in a class and the probability of at least 8 showing up on a given day is 90 percent. Then the probability of 7 or fewer showing that day is 10 percent.
Q:
If a single die is rolled (a cube where the sides are numbered 1 through 6), the probability of rolling at least a 3 is 0.33.
Q:
A used car lot has 15 cars. Five of these cars were manufactured in the United States and the others were made in other countries. If one car is purchased at random from this car lot, the probability that it is a U.S. car is 0.33.
Q:
Mutually exclusive means that the occurrence of event A has no effect on the probability of the occurrence of event B, and independent means the occurrence of event A prevents the occurrence of event B.
Q:
Sometime it is necessary to assign probabilities based on a person's belief that an outcome will occur.
Q:
When a construction company bids on a contract, the events will be win or lose. The closer the probability is to 0.50, the greater the uncertainty about whether the company will win or lose the bid.
Q:
During the past week, of the 250 customers at the Dairy Queen who ordered a Blizzard, 50 ordered strawberry. This means that of the next five Blizzard customers, exactly one will order strawberry.
Q:
A dam on a river that holds back a water reservoir begins to leak. Engineers say that there is a 10 percent chance of the dam breaking if repairs are not made. This is an example of classical probability.
Q:
It is correct to say that subjective probability assessments are neither right nor wrong, but are merely reflections of the state of mind of the individual making the probability assessment.
Q:
A New Jersey company relies on a steady supply of power to keep its manufacturing going. Recently at a planning meeting, the general manager stated that the chance of a rolling blackout affecting production is 0.15. She most likely made this assessment using subjective probability assessment.
Q:
At a potato processing plant in the state of Washington, 400 potatoes have been examined for disease. Of these, four were diseased. Based on this, the plant manager has stated that the probability of finding a diseased potato is 0.01. He is applying subjective probability to arrive at this 0.01 value.
Q:
Suppose a coin is flipped twice. The event of getting heads on the first toss and the event of getting heads on the second toss could be said to be mutually exclusive.
Q:
One of the difficulties in using the relative frequency of occurrence method for assessing probabilities in business situations is getting a large enough set of examples that match the one in question.
Q:
If you were planning to take a small group out to dinner on a Thursday evening and you were considering whether to call ahead for a reservation, the method of probability assessment you would most likely use to assess the chances of being able to get in for dinner without having a reservation would be subjective assessment.
Q:
When a patient arrives at a clinic complaining of several specific symptoms, the doctor who makes the diagnosis says that he is 80 percent certain that the patient has a particular problem. It is likely that he is basing this assessment on relative frequency of occurrence.
Q:
The owners of Greg's Department Store have reason to believe that one of their employees has been stealing from the store. In an interview with the police, the owner says that she is 75 percent sure that the employee is stealing. This probability is an example of one that was assessed using classical probability.
Q:
Classical probability assessment is likely to be the most common method of probability assessment used in business decision making.
Q:
If a manager were interested in assessing the probability that a new product will be successful in a New Jersey market area, she would most likely use relative frequency of occurrence as the method for assessing the probability.
Q:
In playing the game Monopoly, the probability of a player landing on Park Place would be assessed using classical probability assessment.
Q:
Suppose a player is dealt 2 cards from a standard deck of 52 playing cards. To determine the probability of having a blackjack would involve classical probability.
Q:
A product that is produced at Ramsey Manufacturing goes through three steps to be built. At step one, the components are assembled by technicians. At step two, the product is sanded, and at step three the product is painted. The product can become defective if any of these three steps is performed incorrectly. The three steps are done by different people in different locations. We let D1 = defect introduced at step 1, D2 = defect introduced at step 2, and D3 = defect introduced at step three. Based on this situation these three events would be considered to be mutually exclusive.
Q:
Two football teams play in the Super Bowl. The event of team A winning and the event of team B winning can be said to be mutually exclusive.
Q:
A manufacturing company makes three types of products. Each time it makes a product, the item can be either good or defective and it can be either customized or standard. The events consisting of customized and defective would be considered mutually exclusive since they apply to different attributes of the product.
Q:
In most situations, there is no difference between the events and the elementary events.
Q:
Suppose a single die (a 6-sided cube with sides numbered 1 through 6) is rolled once. The event of interest is defined as rolling an even number. This can be said to be an elementary event.
Q:
If two events are mutually exclusive, it is possible for them to also be independent of each other.
Q:
If a company has the opportunity to bid on three contracts, A, B, and C, then the number of these contracts that are awarded to the company would be considered an elementary event.
Q:
If the probability of one event occurring is .40 and the probability of a second event occurring is 0.60, then the probability that both events will occur must be 1.0 since that is the maximum value a probability can be.
Q:
A car salesman states that the probability that the dealership sells a car on a Saturday morning is .30. The method of probability assessment that he has used is most likely classical assessment.
Q:
A car salesman has noted that the probability that the dealership sells a car on a Saturday morning is .30. Then the probability of the dealership not selling a car on Saturday morning is .70.
Q:
Explain why it is possible for two managers to assess different values for the probability that a supplier will fail to deliver a shipment on time.
Q:
Explain what is meant by the term mutually exclusive events. Cite an example.
Q:
Assume that a standard deck of 52 playing cards is randomly shuffled and the first 2 cards are dealt to you. What is the probability that you have a blackjack? A blackjack is where one card is an ace and the other card is worth 10 points. The 10-point cards are kings, queens, jacks and 10's.
Q:
The accountant for a large U.S. company is interested in finding the probability that an account will have an incorrect balance due to being overstated or being understated. To find this probability, which probability rule is she likely to use?
Q:
List three methods of assessing probabilities and indicate which is least likely to be used in business decision making.
Q:
A distributor of outdoor yard lights has four suppliers. This past season she purchased 40% of the lights from Franklin Lighting, 30% from Wilson & Sons, 20% from Evergreen Supply, and the rest from A. L. Scott. In prior years, 3% of Franklin's lights were defective, 6% of the Wilson lights were defective, 2% of Evergreen's were defective, and 8% of the Scott lights were defective. When the lights arrive at the distributor, she puts them in inventory without identifying the supplier. Suppose that a defective light string has been pulled from inventory; what is the probability that it was supplied by Franklin Lighting?
A) 0.33
B) 0.45
C) 0.18
D) 0.29
Q:
Parts and Materials for the skis made by the Downhill Adventures Company are supplied by two suppliers. Supplier A's materials make up 30% of what is used, with supplier B providing the rest. Past records indicate that 15% of supplier A's materials are defective and 10% of B's are defective. Since it is impossible to tell which supplier the materials came from once they are in inventory, the manager wants to know which supplier most likely supplied the defective materials the foreman has brought to his attention. Provide the manager this information.
A) Supplier A
B) Supplier B
C) Both are equally likely
D) Cannot be determined from this information
Q:
Vegetables from the summer harvest are currently being processed at Skone and Conners Foods, Inc. The manager has found a case of cans that has not been properly sealed. There are three lines that processed cans of this type, and the manager wants to know which line is most likely to be responsible for this mistake. Provide the manager this information. Line
Contribution to Total
Proportion Defective 1
0.40
0.05 2
0.35
0.10 3
0.25
0.07 A) Line 1
B) Line 2
C) Line 3
D) Cannot be determined from this information
Q:
Until the summer of 2006, the real estate market in Fresno, California, had been booming, with prices skyrocketing. Recently, a study showed the sales patterns in Fresno for single-family homes. One chart presented in the commission's report is reproduced here. It shows the number of homes sold by price range and number of days the home was on the market. Using the relative frequency approach to probability assessment, what is the probability that a house will be on the market more than 7 days?
A) 0.31
B) 0.099
C) 0.58
D) 0.48
Q:
Drake Marketing and Promotions has randomly surveyed 200 men who watch professional sports. The men were separated according to their educational level (college degree or not) and whether they preferred the NBA or the National Football League (NFL). The results of the survey are shown: Sports Preference
College Degree
No College Degree NBA
40
55 NFL
10
95 Suppose a survey participant is randomly selected and you are told that he has a college degree. What is the probability that this man prefers the NFL?
A) 0.5250
B) 0.2000
C) 0.6050
D) 0.5880
Q:
Drake Marketing and Promotions has randomly surveyed 200 men who watch professional sports. The men were separated according to their educational level (college degree or not) and whether they preferred the NBA or the National Football League (NFL). The results of the survey are shown: Sports Preference
College Degree
No College Degree NBA
40
55 NFL
10
95 What is the probability that a randomly selected survey participant has a college degree and prefers the NBA?
A) 0.5250
B) 0.2000
C) 0.6050
D) 0.5880
Q:
Drake Marketing and Promotions has randomly surveyed 200 men who watch professional sports. The men were separated according to their educational level (college degree or not) and whether they preferred the NBA or the National Football League (NFL). The results of the survey are shown: Sports Preference
College Degree
No College Degree NBA
40
55 NFL
10
95 What is the probability that a randomly selected survey participant prefers the NFL?
A) 0.5250
B) 0.2000
C) 0.6050
D) 0.5880
Q:
Hubble Construction Company has submitted a bid on a state government project that is to be funded by the federal government's stimulus money in Arizona. The price of the bid was predetermined in the bid specifications. The contract is to be awarded on the basis of a blind drawing from those who have bid. Five other companies have also submitted bids.
Suppose that there are two contracts to be awarded by a blind draw. What is the probability of Hubble winning both contracts? Assume sampling with replacement.
A) 0.2778
B) 0.1667
C) 0.6944
D) 0.0278
Q:
Hubble Construction Company has submitted a bid on a state government project that is to be funded by the federal government's stimulus money in Arizona. The price of the bid was predetermined in the bid specifications. The contract is to be awarded on the basis of a blind drawing from those who have bid. Five other companies have also submitted bids.
What is the probability of the Hubble Construction Company winning the bid?
A) 0.2778
B) 0.1667
C) 0.6944
D) 0.0278
Q:
A local FedEx/Kinkos has three black-and-white copy machines and two color copiers. Based on historical data, the chances that each black-and-white copier will be down for repairs is 0.10. The color copiers are more of a problem and are down 20% of the time each.
If a customer wants both a color copy and a black-and-white copy, what is the probability that the necessary machines will be available? (Assume that the color copier can also be used to make a black-and-white copy if needed.)
A) 0.04
B) 0.96
C) 0.47
D) 0.42
Q:
A local FedEx/Kinkos has three black-and-white copy machines and two color copiers. Based on historical data, the chances that each black-and-white copier will be down for repairs is 0.10. The color copiers are more of a problem and are down 20% of the time each.
Based on this information, what is the probability that if a customer needs a color copy, both color machines will be down for repairs?
A) 0.04
B) 0.96
C) 0.47
D) 0.42
Q:
Men have a reputation for not wanting to ask for directions. A Harris study conducted for Lincoln Mercury indicated that 42% of men and 61% of women would stop and ask for directions. The U.S. Census Bureau's 2012 population estimate was that for individuals 18 or over, 48.2% were men and 51.8% were women. This exercise addresses this age group.
Given that a driver stops to ask for directions, determine the probability that the driver was a man.
A) 0.518
B) 0.420
C) 0.316
D) 0.390
Q:
Men have a reputation for not wanting to ask for directions. A Harris study conducted for Lincoln Mercury indicated that 42% of men and 61% of women would stop and ask for directions. The U.S. Census Bureau's 2012 population estimate was that for individuals 18 or over, 48.2% were men and 51.8% were women. This exercise addresses this age group.
Calculate the probability that the driver stops to ask for directions.
A) 0.518
B) 0.420
C) 0.316
D) 0.390
Q:
Men have a reputation for not wanting to ask for directions. A Harris study conducted for Lincoln Mercury indicated that 42% of men and 61% of women would stop and ask for directions. The U.S. Census Bureau's 2012 population estimate was that for individuals 18 or over, 48.2% were men and 51.8% were women. This exercise addresses this age group.
A randomly chosen driver gets lost on a road trip. Determine the probability that the driver is a woman and stops to ask for directions.
A) 0.518
B) 0.420
C) 0.316
D) 0.390
Q:
Suppose a quality manager for Dell Computers has collected the following data on the quality status of disk drives by supplier. She inspected a total of 700 disk drives. What is the probability of a defect given that company B supplied the disk drive?
A) 0.077
B) 0.28
C) 0.021
D) 0.76
Q:
Suppose a quality manager for Dell Computers has collected the following data on the quality status of disk drives by supplier. She inspected a total of 700 disk drives. What is the probability of a defective disk drive being received by the computer company?
A) 0.07
B) 0.28
C) 0.021
D) 0.76
Q:
Suppose a quality manager for Dell Computers has collected the following data on the quality status of disk drives by supplier. She inspected a total of 700 disk drives. Based on these inspection data, what is the probability of randomly selecting a disk drive from company B?
A) 0.07
B) 0.28
C) 0.021
D) 0.76
Q:
The URS construction company has submitted two bids, one to build a large hotel in London and the other to build a commercial office building in New York City. The company believes it has a 40% chance of winning the hotel bid and a 25% chance of winning the office building bid. The company also believes that winning the hotel bid is independent of winning the office building bid.
What is the probability the company will lose both contracts?
A) 0.55
B) 0.45
C) 0.10
D) 0.75
Q:
The URS construction company has submitted two bids, one to build a large hotel in London and the other to build a commercial office building in New York City. The company believes it has a 40% chance of winning the hotel bid and a 25% chance of winning the office building bid. The company also believes that winning the hotel bid is independent of winning the office building bid.
What is the probability the company will win at least one contract?
A) 0.55
B) 0.45
C) 0.10
D) 0.75
Q:
The URS construction company has submitted two bids, one to build a large hotel in London and the other to build a commercial office building in New York City. The company believes it has a 40% chance of winning the hotel bid and a 25% chance of winning the office building bid. The company also believes that winning the hotel bid is independent of winning the office building bid.
What is the probability the company will win both contracts?
A) 0.55
B) 0.44
C) 0.10
D) 0.75
Q:
Three events occur with probabilities P(E1) = 0.35, P(E2) = 0.15, P(E3) = 0.40. If the event B occurs, the probability becomes P(E1|B) = 0.25, P(B) = 0.30.
Assume that E1, E2, and E3 are independent events. Calculate P(E1 and E2 and E3).
A) 0.575
B) 0.075
C) 0.021
D) 0.475