Question 1:

In New York State, savings banks are permitted to sell a form of life insurance called
savings bank life insurance (SBLI). The approval process consists of underwriting, which
includes a review of the application, a medical information bureau check, possible requests
for additional medical information and medical exams, and a policy compilation stage,
during which the policy pages are generated and sent to the bank for delivery. The ability
to deliver approved policies to customers in a timely manner is critical to the profitability
of this service to the bank. During a period of one month, a random sample of 27 approved
policies was selected, and the following were the total processing times:

73 9 16 64 28 28 31 90 60 56 31 56 22 18 45 48 17 17 17 91 92 63 50 51 69 16 17

Part A: Compute the mean, median, and mode

16,16,17,17,17,17,17,18,19,22,28,28,31,31,45,48,50,51,56,56,60,63,64,69,72,90,91,92

1. Mean = ∑xi / n

= 1185 / 27
= 43.89

2. Median = 45 (Total No of observation= 27 odd)

(the 14th observation is median, N/2, 27/2, 13.5)

3. Mode = 17 (Highest occurring frequency)

Part 2: Compute the range, variance, and standard deviation, and coefficient of variation

1. Range = Maximum observation – Minimum observation

= 92 – 16
= 76
 2. Variance, ∑xi = 1185, ∑xi2 = 68629
Variance = 1 (68629 – (1185)2/ 27)
26

= 639.2564

3. Standard Deviation = √ variance

=√ 639.2564
= 25.2835

4. Coefficient of variation = 100 * standard deviation/ x

=100 * 25.2835/ 43.89

= 57.6065
Part 3: Are the data skewed? If so, how?

Answer: often all the observations are on low end of box plot, therefore the distribution of data
is partially skewed.

Part 4: What would you tell a customer who enters the bank to purchase this type of
insurance policy and asks how long the approval process takes?

Answer: As the mean < median, so it will take less time for the approval process.
Question 2
One of the major measures of the quality of service provided by an organization is the
speed with which it responds to customer complaints. A large family-held department store
selling furniture and flooring, including carpet, had undergone a major expansion in the
past several years. In particular, the flooring department had expanded from 2 installation
crews to an installation supervisor, a measurer, and 15 installation crews. The business
objective of the company was to reduce the time between when the complaint is received
and when it is resolved. During a recent year, the company received 50 complaints
concerning carpet installation. The data from the 50 complaints represent the number of
days between the receipt of a complaint and the resolution of the complaint:

54 5 35 137 31 27 152 2 123 81 74 27 11 19 126 110 110 29 61 35 94 31 26 5 12

4 165 32 29 28 29 26 25 1 14 13 13 10 5 27 4 52 30 22 36 26 20 23 33 68

Part A: Compute the mean, median, and mode.

1. Mean = ∑x/ n

= 2152/ 50

=43.04

2. Median = 0.5 (n+1) th value = 25.5th value of sorted data

=28.5

Quartile, Q1= 0.25 (n+1) th value = 12.75th value of sorted data

= 13.75
 Quartile, Q2 = 0.75 (n+1) th value = 12.75th value of sorted data

= 55.75

3. Mode = 5, 27, 29 (Highest occurring frequency)

Part 2: Compute the range, variance, standard deviation, and coefficient of variation

1. Range = Maximum observation – Minimum observation

= 165 – 1
= 164

2. Variance, ∑xi = 2152, ∑xi2 = 178754

Variance = 1 (178754 – (2152)2/ 50)
49

=86131.92 / 49

= 1757.794

3. Standard Deviation = √ variance

=√ 1757.794

= 41.926

4. Coefficient of variation = standard deviation/ x

= 41.926/ 43.04

= 0.9741171
Part 3: Are the data skewed? If so, how?

From box plot, data is positively right skewed.

Part 4: Are there any outliers in data? If so, which ones.

Yes, there are outliers in the data. 1 and 165 are the outliers in the data.

Part 5: On the basis of the results of (a) through (c), if you had to tell the president of the
company how long a customer should expect to wait to have a complaint resolved, what
would you say? Explain

Since the data is right skewed, a better measure of the centre for this distribution would be the
median that is equal to 28.5

Question 3

Given below are the room price (in $) paid by U.S. travellers in six British cities in 2009:

185 0 126 116 112 105

Part 1: Compute the mean, median, and mode.

1. Mean = ∑xi / n

= 804 / 6
= 134

2. Median = 0.5 (n+1) th value= 3.5th value of sorted data

 = 121
3. Mode = Nill (Highest occurring frequency)

Part 2: Compute the range, variance, and standard deviation.

1. Range = Maximum observation – Minimum observation

= 185 – 105
= 80

2. Variance, ∑xi = 804, ∑xi2 = 112726

Variance = 1 (112726 – (804)2/ 6)
5

=4990 /5

= 998

3. Standard Deviation = √ variance

=√ 998

= 31.591138

Part 3: Based on the results of (a) and (b), what conclusions can you reach concerning the
room price (in $) paid by U.S. travellers in 2009?

From the output, the mean room price is $134 and the median is $121. Here it can be observed
that Mean > Median. Therefore the data can be considered as right skewed.
Part 5: Suppose that the first value was 85 instead of 185. Repeat (a) through (c), using this
value. Comment on the difference in the results.
 85 160 126 116 112 105
Part a.

1. Mean = ∑xi / n

= 704 / 6
= 117.333

2. Median = 0.5 (n+1) th value= 3.5th value of sorted data

= 114
3. Mode = Nill (Highest occurring frequency)

Part b.
1. Range = Maximum observation – Minimum observation
= 160 – 85
= 75

2. Variance, ∑xi = 704, ∑xi2 = 85726

Variance = 1 (85726 – (704)2/ 6)
5

=3123.3333 /5

= 624.66666

3. Standard Deviation = √ variance

 =√ 624.6666

= 24.99333111

From the output, the mean room price is $117 and the median is $114. Here it can be observed
that Mean > Median. Therefore the data can be considered as right skewed.