Unit 4: Continuous probability models and CLT

1. The costs of Luminox company follow the function C = 5,000 + X.

a) Calculate the expected benefit of the company if the sale price of each unit is P X = 200
€ and the demand takes values in the interval [250,000, 300,000].
b) Obtain the representativity of the expected benefit.

2. The results of the final exam in a refresher course for telephone operators from a phone
company follow a normal distribution N(5, 2). The rules are that a telephone operator will
not promote in case of reaching 3 points or less, and he will promote when he reaches
more than 3 points.

a) What is the probability that a telephone operator who attends a refresher course
reaches more than 6 points?
b) Subsequently, the company wants to organise a seminar of specialization for the
telephone operators who have obtained more than 3 points in the above exam. If the
refresher course is followed by 200 people, how many people will attend the seminar
of specialization?

3. The weight of a salt package is random and oscillates between 980 and 1,030 grams. The
company distributes the product among his clients guaranteeing a minimum Price of 1 kg.

a) Justify the probability distribution used to model the weight of the salt package.
b) Which is the probability that a random package does not satisfies the guarantee?
c) Given a lot of 500 salt packages, calculate the average weight, the variance and the
Pearson coefficient.
d) How is the weight of the 500 packages distributed using the CLT?
e) Obtain the probability that the weight of the 500 packages exceeds the 503,000 grams.

4. The price of a round trip in the Madrid-Barcelona airlift, obtained by online shopping
follows a normal distribution with average 200 € and standard deviation 25 €.

a) Do you agree with the chosen model, i.e., do you think the price of the trip is
distributed according to a normal distribution? Justify why it is a continuous variable
and why it is not a uniform distribution.
b) Calculate the representativity of the expected value of this variable.
c) Which is the maximum price paid by a common user of the airways company in the
90% of times?
d) Given two people in the same airplane, which is the probability that user A has paid at
least 30€ more than user B?

5. A user should know what would be the percentage of average savings which he would
obtain if he decides to switch his telephone company. The conditions are the following:
Both companies apply a fee of 30 monetary units by minute, the company “A” bills in 3
minutes blocks (if a call has a duration over 3 minutes and less than 6 minutes, the
company bills 6 minutes) and the company “B” bills exactly the time spent. The user
makes calls which duration is a random variable which follows a uniform distribution
between 0 and 9 minutes. What would be the percentage of average savings if the user
switches from “A” to “B”?
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6. A catering company estimates that its annual incomes (in thousands) are randomly
distributed following a N(75, 3) and the annual costs (in thousands) follow a N(40, 4).

a) Justify the probability distribution used to model the annual benefits of the company.
b) Which is the probability of obtaining a benefit between 45 and 50 euros (in
thousands)?
c) With which probability the company will obtain an annual benefit of exactly 35
thousand euros?
d) Which will be the maximum annual benefit of the company with a probability of 0.95?

7. The monthly sales of a supermarket oscillate from 10 to 15 millions. Assume the sales of
a month are independent from those of another month.

a) Justify the probability distribution used to model the monthly sales.

b) Which is the expected volume of sales of the company by the end of the month?
c) Which is the expected volume of sales of the company by the end of the year?
d) Calculate and interpret the dispersion in the results obtained in sections b) and c).

8. An agricultural cooperative pays its partners the orange kg at 25 m.u. The weight in grams
of each orange is a random variable distributed accordingly distributed accordingly to
N(150, 60). The oranges are classified in three classes: A (more than 200 grs.), B (from
100 to 200 grs.) and C (below 100 grs.). Class A oranges are sold to 40 m.u./kg, class B
at 30 m.u./kg and class C at 23 m.u./kg.

a) Justify the probability distribution used to model the weight of the oranges.
b) Which is the percentage of oranges per class?
c) Calculate the incomes obtained by a sale of 1,000 kg of oranges.
d) Obtain the benefits obtained in a sale of 1,000 kg of oranges.

9. 500 students are attending a subject. The probability for a student to apply for the subject
test is 0.7. The marks of the students follow a normal distribution N(4.5, 2). Calculate:

a) The percentage of students who is expected to pass the subject.

b) The number of enrolled students who would pass the subject.
c) The percentage of students who having applied for the subject test, they would obtain
a mark equal or more than 7 points.
d) What would be the percentage of students who would obtain a mark equal or more
than 5 points and less than 7 points?

10. The turnover of a store varies between 380 and 1,200 thousands euros. Determine:

a) The probability that the sales were over one million euros.
b) What is the expected value of the sales and its dispersion?

11. The height (in centimetres) of 21 years old men in a country is a random variable which
follows a normal distribution N(170,5). If we know that a 21 years old man has a height
over 160 cm, what would be the probability that this man has a height over 170 cm?

12. The monthly volume of credit granted by a financial entity for building construction
during the first 4 months of the year oscillates between 25 and 40 millions. The monthly
credit quantities are independent of each order.

a) Justify the probability used to model the monthly volume of credit.

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 b) Calculate the expected value of credit granted in a random month.
c) Obtain the expected value of granted credits during the first quarter.
d) Explain the dispersions associated to the expected value of the granted credits during
the first quarter.

13. The annual production in each of the wine’s twelve varieties in a cellar varies between 10
and 15 thousand litres. We suppose that the production of each variety is independent
from of one other, and from other harvests. We want to calculate the volume of
production that the cellar expects to harvest in the following year for each variety and for
the entire cellar.

14. The demand of oil (thousand litres) in a specific period is a random variable which
follows a normal distribution N(150, 10). Determine the number of litres which it is
necessary to put up for sale in this period, to be sure to satisfy the demand with probability
0.95.

15. The diameters of golf balls follow a probability distribution N(2, 0.10). A ball is defective
if its diameter is less than 1.8 or higher than 2.15.

a) Justify the probability distribution used to model the diameters of the golf balls.
b) How many defective units do we expect in a lot of 300 balls?
c) Assuming an average production cost of 100 m.u. and a sale price of 160 m.u., which
is the benefit of selling 100,000 balls if the defective ones are sold at 10 m.u. each?

16. Two companies “A” and “B” sell the same type of product. The “A” sales (in units)
follow a normal distribution N(1,800; 150), while the “B” sales follow a normal
distribution N(1,650; 120). Determine the probability that the “A” sales were higher to the
“B” sales in more than 100 units, assuming that both sales are independent.

17. The random variable ''Daily volume values in the stock market'' follows a Normal
distribution with average 650 million shares and standard deviation of 100 millions
shares.

a) Justify the used Normal probability distribution to model the ''Daily volume values in
the stock market.
b) Determine the probability that the dealt volume do not exceeds the 450 million shares.
c) Which is the minimum deal volume for that separates the 5% of days with higher
volume from the rest.

18. The delay time of a courier company in each delivery vary between 5 minutes and 2
hours. The compensation to pay would be 1€ per minute of delay.

a) What would be the average compensation paid?

b) What is the probability that a package delayed reaches its destination during the first
20 minutes delay?
c) If we consider 150 deliveries delayed in a day, what would be the daily average
compensation paid and what would be the percentage of packages with a delay more
than an hour?

19. Using the chi-square table, calculate:

a) P(χ25 > 2,67)

b) P(9,59 < χ220 < 23,8)
c) P(χ210 ≤ 18,31)
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 d) P(82,358 < χ2100 < 110)

20. Using the chi-square table obtain the value of x satisfying the following expressions:

a) P(χ26 > x) = 0.75

b) Interval of size 98%, with two symmetric tails, in a χ215 distribution.

21. Using the t-Student table, calculate:

a) P ( t15  2,602 )
b) P ( t5 [ - 1.156 ; 1.156 ])