Business Analytics -1

SEMESTER – 1
(Explain through Z table, Excel, Scientific Calculator for normal prob )
Topic: Normal Distribution- Applications
Q1 Case-let/Numerical [ previous exam question]
About Hyper Local
There’s been a lot of buzz about the hyperlocal market model or non-demand near me delivery model ever
since it has been uncovered. The reason behind the hype is pretty clear because the hyperlocal delivery
model offers both convenience and sufficiency at the same time to the seller and the buyer. This model
opens a door of opportunities for small business owners, which is a reason why many business areadoptng
this model.
ABOUT AAGYO: Mukul Mehta returned to his home in a small town in Uttarakhand afer completing his
graduation from Uttarakhand Technical University in September 2017. ‘when I came back to Nanakmatta,
there was no aggregator or service provider to help with doorstep delivery. I started researching the area
and people’s needs (while maintaining Zappier’s Academy), and realized that locals wanted these services
but had no options,’ Mukal says.
In July 2021, he launched AAGYO a delivery app that transports anything – food, vegetables, groceries,
apparel, accessories, packaging and more – to your in a few minutes. The average delivery time for AA 30
mins with a standard deviation of 5 minutes. If a new delivery has been places, what is the probability that
customer will get his delivery
a). Within 38 mins.
b). Between 25 to 38 mins.
c). Between 38 to 42 mins
d). If he wants to announce free delivery to not more than 1% of his customers, what is the cut off time for
this kind of guaranteed free delivery service that he can advertise?
e). in less than 20 mins.

Q2. TP Ltd. Leases copier machines to businesses. Leases are normally distribute with a mean of 25 months
and variance 64.
a). What is the probability that a copier will still be on lease after 33 months?
b). What is the probability that a copier will be returned within one year?
c). What is the probability that a copier will be on lease for more than 17 months but will be returned
before 33 months.
d). What is the probability that a copier will be on lease for a period less than 28 months.
e). What is the probability that a copier will be on lease for more or equal to 25 months?
f). What is the minimum lease period below which the bottom 10% lie?
g). What is the minimum lease period of lease for the top 1%?

Q3). A project yields an average cash-flow of Rs. 500 lakhs with a standard deviation of Rs. 60 lakhs. Assuming
Normal distribution calculate the following probabilities:

i). Cash-flow will be more than Rs. 560 lakhs.[ As: 0.1587]

ii).Cash-flow will be less than Rs. 420 Lakhs.[Ans: 0.0918]

iii). Cash-flow will be between Rs. 460 Lakhs and Rs. 540 Lakhs. [Ans: 0.4572]
Iv Cash-flow will be less than Rs. 680 Lakhs.[Ans: 0.0013]

Q4) Previous Exam question:

The mean life of tube lights installed in a new factory is 120 days and their length of life is normally distributed
with a standard deviation of 20 days

a). What is the probability that the tubelights will expire in less than 90 days? [ Ans: 0.0668]

b). If it is decided to replace all the tubelights together, what interval should be allowed between
replacements if not more than 10 percent should expire before replacement? [ Ans: the tube lights would be
replaced after 94 days]

Q5). Previous Exam question:

According to a survey by Chennai based research firm, the average cumulated student loan debt for post
graduate programme is Rs. 8,00,000 with a standard deviation of Rs. 85,000.

i). What proportion of students have more than Rs. 10,00,000 as loan debt?[ Ans: 0.00939]

ii). What is the probability of students with a loan debt of 7,50,000 or less?[ Ans: 0.2782]

iii). Find the probability of students with a loan debt between Rs. 8,50,000 and Rs. 9,00,000. [ ans: 0.1585]

iv). What is the minimum loan debt owed by top 10% of the students? [ Ans: x = 9,08,800]

Q6). Previous Exam question:

A telephone company has launched a new service in a particular region. In this region, the company has
estimated that the average monthly bill is Rs. 1,500 with a standard deviation of Rs. 715. The monthly bills are
normally distributed and a bill is randomly selected. Calculate the following probabilities.

a). Bill amount is more than Rs. 1,800 [ 0.3372]

b). Bill amount is less than Rs. 1,900 [0.7123]

c). Bill amount is less than Rs. 1,500 [0.5]

d). Bill amount is between Rs. 1,300 and Rs. 1,700 [0.2206]

Q7) The manager of Excel Computer Spares is deliberating on the existing policy of ordering printer cartridges.
Presently 60 cartridges are ordered per month, but the firm runs out of stock one out of every five months. On
average, the firm sells 45 cartridges per month. It is assumed that the monthly demand for the cartridges is
normally distributed. The manager wants to order enough cartridges so that the probability of running out of
stock during any month is not more than 0.10.
Find out the number of cartridges that should be ordered per month by the firm.

68 cartridges
(Inverse Transformation Q, with unknown S.D)
Q8. Assume the mean height of soldiers to be 68.22 inches with a variance of 10.8 inches^ 2. How many soldiers
in a regiment of 1000 would you expect to be over 6 feet tall? How many are below 5.5 feet? Assume heights
to be normally distributed. (125 and 254)

Q9. The height of an adult male is known to be normally distributed with a mean of 69 inches and a standard
deviation of 2.5 inches. What should be the height of the doorway such that 96 percent of the adult males can
pass through it without having to bend? (73.375 inches)

Q10. The lifetime of light bulbs produced in a certain factory is normally distributed with mean 3000 hours and
standard deviation 50 hours. Find the probability that a randomly chosen light bulb has a lifetime less than
2900 hours. (2.28%).s

Q11. A set of examination marks is approximately normally distributed with a mean of 75 and SD of 5. If the
top 5% of students get grade A and the bottom 25% get grade F, what mark is the lowest and what mark is the
highest? (83.22 and 71.65)

Q12. The distribution of weights in a large group is approximately normally distributed. The mean is 80 kg. and
approximately 68% of the weights are between 70 and 90 kg. Find the standard deviation of the distribution of
weights. (10 Kg)

Few More questions for practice:

1. One of the side effects of flooding a lake in northern boreal forest areas is that mercury is leached from the
soil, enters the food chain, and eventually contaminates the fish. The concentration in fish will vary among
individual fish because of differences in eating patterns, movements around the lake, etc. Suppose that the
concentrations of mercury in individual fish follows an approximate normal distribution with a mean of 0.25 ppm
and a standard deviation of 0.08 ppm. Fish are safe to eat if the mercury level is below 0.30 ppm. What
proportion of fish are safe to eat?

2. . Marks on a Business Analytics test follow a normal distribution with a mean of 65 and a standard deviation
of 12. Approximately what percentage of the students have scores below 50?

3. The grade point averages of students at the University of Manitoba are approximately normally distributed
with mean equal to 2.4 and standard deviation equal to 0.8. What fraction of the students will possess a grade
point average in excess of 3.0 ?

4. The marks on a statistics test are normally distributed with a mean of 62 and a variance of 225. If the
instructor wishes to assign B’s or higher to the top 30% of the students in the class, what mark is required to
get a B or higher?

5. The diameters of steel disks produced in a plant are normally distributed with a mean of 2.5 cm and
standard deviation of .02 cm. What is the probability that a disk picked at random has a diameter greater than
2.54 cm ?
6. The time required to assemble an electronic component is normally distributed with a mean of 12 minutes
and a standard deviation of 1.5 min. Find the probability that a particular assembly takes more than 14.25
minutes.

7.. Heights of males are approximately normally distributed with a mean of 170 cm and a standard deviation of
8 cm. What fraction of males are taller than 176 cm?

9. The heights of students at a college are normally distributed with a mean of 175 cm and a standard
deviation of 6 cm. How many of the students in a sample of 1000 students have height less than 163 cm ?

10. The marks on a statistics test are normally distributed with a mean of 62 and a variance of 225. If the
instructor wishes to assign B’s or higher to the top 30% of the students in the class, what mark is required to
get a B or higher?