Indian Institute of Management Rohtak

PGP
Course – Probability Analysis
Mid-Term Exam
Faculty In-charge: Dr. Priyank Sinha, Dr. Aditya K. Sahu

Note- All questions are compulsory Total Marks- 20

Duration: 1 hour 30 minutes Date – Aug 12, 2021

Instructions:
1. This is a closed book exam.
2. Use of scientific calculator is prohibited. Non-scientific calculator is allowed.
3. Write legibly.
4. Make necessary assumptions, and state them clearly.
5. You will be evaluated on the step marking, so take outmost care to not skip any step.
6. Please follow PGP office instructions on scanning and uploading answer script.
7. No copying from peers. If found copying in any form, it will lead to the reward of
“F”- grade in entire course.

Q1. IndianVax is facing a decision dilemma whether it should develop nasal vaccine for
COVID-19 or not. For development, first it will have to test the market at the cost of $ 100,000.
Past experience suggests indicate that only 30% of the products clear this phase.
After clearing this phase, IndianVax will be required to commission a small dedicated plant at
the cost of $ 150,000 with production capacity of 2000 units/year or a large dedicated plant at
the cost of $ 250,000 with the production capacity of 4000 units/year.
Marketing department have further estimated that there is a 40% chance that the competitors
will respond with a similar product and the price of the unit sold will be -
Large Plant Small Plant
Competition Respond 20 35
Competition do not 50 65
Respond

Assuming the patent life to be 7 years and the yearly running cost of both plants be $ 50,000,
assist IndianVax in resolving the decision dilemma through the use of decision trees.
[3]

1
Q2. As an assignment to evaluate the performance cardiology department in the hospital,
research scholar had interviewed 200 patients who had either undergone coronary angioplasty
surgery, or coronary bypass surgery. Table below summarizes the responses of 200 patients
Surgery Satisfied Dissatisfied Total
Coronary Bypass 70 25 95
Coronary 90 15 105
Angioplasty
Total 160 40 200

If one patient treated by the department is selected at random, determine the probability that

(a) patient is satisfied, given that s/he had the bypass surgery.
(b) patient is dissatisfied, given that s/he had angioplasty.
(c) patient had bypass surgery, given that s/he is dissatisfied [2+2+2]

Q3. A fair die is rolled simultaneously with a toss of a fair coin. X is a random variable
associated with the toss of coin, while Y is a random variable associated with the roll of die.

a) Calculate the CDF at (X=1, Y=5).

b) Calculate the marginal probabilities of X and Y.
c) Calculate the conditional probability P(X=0|Y=4).
d) Are X and Y independent? Substantiate your answer. [1+1+1+1]

Q4. The number of defects in a machine-made product is a random variable X with following
probability distribution:
[1+1+1+1+1]

x P(x)
0 0.1
1 0.2
2 0.1
3 k
4 2k
5 0.3

Find the value of ‘k’ and probability that number of defects will be –
a) not less than 3
b) at most 3
c) less than 4 but more than 2
d) at least 3
e) Find the cumulative distribution

Q5. In a shipment of 14 computer parts, 3 are faulty and the remaining 11 are in working order.
Three elements are randomly chosen out of the shipment. What is the probability that all three
faulty elements will be the ones chosen? [2]