GB513: Business Analytics

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Unit 3: Assignment In this Assignment, you will be assessed based on the following outcome:

GB513-2: Apply hypothesis testing and probability analysis to solve business problems.

This Assignment has two parts. Part 1 has questions about probability calculations. Part 2 has

questions about hypothesis testing. You will use Excel only in Question 6. All other questions should

be calculated manually. Follow all instructions carefully.

Make sure to use the Unit 3 Assignment template located in the Course Documents module to

submit your answers. Type in your calculations. Pictures of hand written work are not acceptable.

Part 1

Question 1

In a class where the exam averages are normally distributed, the mean score is 75 and the standard

deviation is 10. If you want to find out the probability that a randomly picked student has scored 105

or above, what is the z-value that you should look up on the normal distribution table?

Question 2

According to a report by Scarborough Research, the average monthly household cellular phone bill is

$73. Suppose local monthly household cell phone bills are normally distributed with a standard

deviation of $11.

a. What is the probability that a randomly selected monthly cell phone bill is less than $95?

b. What is the probability that a randomly selected monthly cell phone bill is between $62 and

$84?

Question 3

A Travel Weekly International Air Transport Association survey asked business travelers about the

purpose for their most recent business trip. 19% responded that it was for an internal company visit.

Suppose 950 business travelers are randomly selected.

a. What is the probability that more than 20% of the business travelers say that the reason for

their most recent business trip was an internal company visit?

b. What is the probability that between 18% and 20% of the business travelers say that the

reason for their most recent business trip was an internal company visit?

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Part 2

Question 4

Suppose a study reports that the average price for a gallon of self-serve regular unleaded gasoline is

$3.16. You believe that the figure is higher in your area of the country. You decide to test this claim

for your area of the United States by randomly calling gasoline stations. Your random survey of 25

stations produces the following prices (all in dollars). Assume gasoline prices for a region are

normally distributed.

Did the data you obtained provide enough evidence to reject the claim? Use a 1% level of

significance.

Make sure you clearly state both the null and the alternative hypotheses in full sentences. Following

your calculations, clearly state the conclusion in the same manner (do not simply say “accept/reject

null”) and explain how you arrived at this conclusion (based on which metrics).

3.27

3.3

3.16

3.15

3.11

3.05

3.54

3.25

3.05

3.11

3.13

3.15

3.27

3.14

3.14

3.2

3.3

3.09

3.05

3.07

3.37

3.34

3.35

3.35

3.1

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Question 5

Where do CFOs get their money news? According to Robert Half International, 47% get their money

news from newspapers, 15% get it from communication/colleagues, 12% get it from television, 11%

from the Internet, 9% from magazines, 5% from radio, and 1% do not know. Suppose a researcher

wants to test these results. She randomly samples 76 CFOs and finds that 40 of them get their

money news from newspapers. Does the test show enough evidence to reject the findings of Robert

Half International? Use a = .05.

Make sure you clearly state both the null and the alternative hypotheses in full sentences. Following

your calculations, clearly state the conclusion in the same manner (do not simply say “accept/reject

null”) and explain how you arrived at this conclusion (based on which metrics).

Question 6

To answer this question, use the Data Analysis Toolpack in Excel and select “t-Test: Two-Sample

Assuming Equal Variances” from the list of available tools. Conduct a hypothesis test using this tool.

Explain your answer (how you decided if men spend more or not) and include the output table.

Some studies have shown that in the United States, men spend more than women buying gifts and

cards on Valentine’s Day. Suppose a researcher wants to test this hypothesis by randomly sampling

men and women with comparable demographic characteristics from various large cities across the

United States to be in a study. Each study participant is asked to keep a log beginning 1 month

before Valentine’s Day and record all purchases made for Valentine’s Day during that 1-month

period. The resulting data are shown below. Use these data and a 1% level of significance to test to

determine if, on average, men actually do spend significantly more than women on Valentine’s Day.

Assume that such spending is normally distributed in the population and that the population variances

are equal.

Make sure you clearly state both the null and the alternative hypotheses in full sentences. Include the

output table; then, clearly state the conclusion in the same manner (do not simply say “accept/reject

null”) and explain how you arrived at this conclusion (based on which metrics).

Men Women

107.48 125.98

143.61 59.32

90.19 96.35

125.53 80.62

70.79 77.6

83 84.34

129.63 75.21

154.22 68.48

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93.8 65.84

111.25 126.11

78.6 82.54

89.35 123.5

Directions for submitting your Assignment

Make sure to use the Unit 3 Assignment template from Course Resources when you turn in your

answers. Submit your Assignment to the Dropbox.

Unit 3 Assignment

Criteria

Points

Possible

Points

Earned

Question 1

The z-score for P(x> 95). 5

Question 2a

Probability that a randomly selected monthly cell phone bill is less than

$95.

10

Question 2b

Probability that a randomly selected monthly cell phone bill is between

$62 and $84.

10

Question 3a

Probability that more than 20% of the business travelers say that the

reason for their most recent business trip was an internal company visit.

10

Question 3b

Probability that between 18% and 20% of the business travelers say

that the reason for their most recent business trip was an internal

company visit.

10

Question 4

Correct null and alternative hypotheses in full sentences. 7

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Question 4

Correct work, explanation, and conclusion in full sentences. 8

Question 5

Correct null and alternative hypotheses in full sentences. 7

Question 5

Correct work, explanation, and conclusion in full sentences. 8

Question 6

Correct null and alternative hypotheses in full sentences. 7

Question 6

Correct Excel table, explanation, and conclusion in full sentences. 8

Properly completed Assignment template. 10

Total 100