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Indian Institute of Management Bangalore

Introduction to Statistical Methods
Midterm
Time: 2 Hrs. Name:______________________________
Max Points: 60 Roll No.:____________________________
This is an open-book and open-note test.
Instructions: Do not seek any clarifications. State all assumptions and/or results, if
any, you are making use of, very clearly in relevant parts. Provide appropriate
arguments and show calculation in support of your final answer. Answer all
questions in the space provided. Do not attach any additional sheets.

1. Hari had to choose between two transport companies for shipping raw material for
his company from Bangalore to one of its factories in Calcutta. SURESHIP offered to
send their material via Hyderabad, whereas QUICKSHIP offered to send to Calcutta
directly. The actual time for each of the legs per (one-way) trip varies, but their means
and standard deviations had been communicated by the two transport companies and Hari
summarized that below:

Transport company Travel between mean time
(hr)
Standard deviation
(hr)
SURESHIP Bangalore-Hyderabad 16.0 1.0
Hyderabad-Calcutta 44.0 2.0
QUICKSHIP Bangalore-Calcutta 68.0 4.0

However, Hari later found out that, SURESHIP sends only one driver, who has to
take three breaks, each of 3 hour duration and these breaks had not been accounted for in
the above table. He is willing to assume that the figures given by the two companies are
accurate otherwise. He is also comfortable assuming that the actual time in each leg (for
either company) is normally distributed and not dependent on one another. Hari needs to
send material once a month to the Calcutta factory. Hari decides to label any shipment to
Calcutta as BAD if it takes any longer than 3 days to reach Calcutta.

a) What is the expected time taken by SURESHIP to transport the material from
Bangalore to Calcutta ?
[2]




b) What is the distribution, including the values of the parameter, of the time
taken by SURESHIP to ship to Calcutta?
[3]




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c) Assuming that Hari decided to use QUICKSHIP for all its shipments to
Calcutta in 2001, what is the expected value of the number of his BAD
shipments to Calcutta in 2001?
[5]


















d) If Hari uses SURESHIP for all its shipments to Calcutta for the next 5 years,
what is the probability that no more than 10 of these shipments would be
labeled as BAD by Hari?
[5]










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e) What is the probability that QUICKSHIP is quicker than SURESHIP in
delivering Haris typical load? [Hint: X > Y X Y > 0]
[5]















f) In 2000, Hari decided to use the two shipping companies in the following
random manner. If any months shipment was due to be sent on a Monday or
Tuesday, he used SURESHIP; and if it was due in any of the remaining four
working days, he used QUICKSHIP. Given that, in this year the shipment sent
in November was labeled as BAD, what is the probability that this shipment
was sent on a Monday or a Tuesday?
[6]
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g) The actual time taken for delivery in the first 7 shipments of 2001 (where Hari
used QUICKSHIP in all these cases) are (in hours):

68.8 64.9 71.0 75.1 74.8 76.9 69.3

Find a 90% confidence interval for the mean time taken by QUICKSHIP to ship
to Calcutta. On the basis of this confidence interval, do you have sufficient reason
to doubt the average delivery time promised by QUICKSHIP?
[6+1=7]


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2. The new military air base was set up recently in the outskirts of Anekal. The
planes, which go out for training and exercises, return to the base at random. There are
two different runways on the base and these can be operated independently. It was
decided that one runway will be exclusively used for landing and the other will be used
for take-off only. Venu Suresh, who is the chief of air traffic controllers (ATCs), has to
decide how many of them should be on each shift. Currently, he has 4 ATCs operating
on each shift. On the basis of the last 20 days of the operations of the air base, Venu has
calculated that he has to handle an average of 15 landings and 15 take-offs per hour. He
has allocated two ATCs to control the landings and the other two for take-offs.

The take-offs can be scheduled well in advance to a large extent. Whenever there are less
than 10 take-offs scheduled in an hour, one ATC can handle the take-offs and the other is
then transferred to control the landings. Because of the initiating processes involved, the
transfers are done on an hourly basis.

a. What is the probability that Venu has 3 ATCs to control the landings in the
first three hours of the morning?
[5]










b. What is the probability that, in an eight hour shift, Venu has 3 ATCs
controlling the landing in at least 2 hours?
[6]

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Venu felt that the average number of landings is likely to be much higher than 15 per hr
in the first shift on this particular day and hence he is considering allotting an extra ATC
(in addition to the 4 he has) for controlling the landings. He knows that such an allotment
is warranted only if the average number of landings is 30 per hour or more, which he
believes is the likely scenario on this shift. However to be more certain, he thought of
timing the gap between the next two landings and decided to allot an extra ATC only if
this gap is less than 180 sec.

c. If Venu, based on the gap between the next two landings, decided not to allot
an extra ATC, what is the probability that he was wrong in his decision?
[6]




















d. Formulate the dilemma as a Testing Hypothesis problem. What would you
call this probability calculated in part c above? , or, something else?
[3]






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e. The gap between the next two landings was actually 50 sec. And Venu
decided to allot an extra ATC for the landings. If the average number of
landings is only 15 per hr. even on this day, what is the type of error that Venu
is committing? What is the probability of committing this error?
[2+5]