1. The number of claims for missing baggage for a well-known airline averages 3 per day. The management wants to know the chances of more than 3 claims for missing baggage so that a decision can be made to improve airport services. The management decides to come up with the following alternatives:

Alternative 1: If the probability is at most 20% they will add 1 baggage attendant

Alternative 2: If the probability is more than 20% but less than 50% they will add 2 baggage attendants

Alternative 3: If the probability is at least 50% they will add 3 baggage attendants.

What is the probability of more than 3 claims for missing baggage?

1. The relationship d=5000-25p describes the demand (d) as price (p) varies. Which price alternative will maximize revenue?

1. Assume that the time required to download a file from the internet is exponentially distributed with mean equal to 4 minutes. What is the probability that a download will require at least 2 minutes but not more than 4 minutes?

1. In another assembly line, the inspector has taken a sample of 100 items and check to see whether or not they are defective. The inspector has been told that the defect rate on this assembly process last week was 5%. The inspector is now preparing a report to the management and plans to recommend an alternative to reduce the number if defective items.

Alternative 1: If the chance of finding more than five defectives is higher than 40% then the assembly system should undergo a corrective action.

Alternative 2: If the chance of finding more than five defectives is at most 40% then the assembly system should undergo a maintenance check only.

What is the best decision?

1. A computer specialist analyzed the returns on stockholder's equity for all the companies listed in the New York StockExchange. He found that the mean of this distribution was 10% with a standard deviation of 5%. He is interested in examining further those companies whose return on stockholder's equity is between 16% and 22%. Of the approximately 1300 companies listed on the exchange, how many are of interest to him?