A company that produces DVD drives has a 6% defective rate. Let X represent the

Question

A company that produces DVD drives has a 6% defective rate. Let X represent the number of defectives in a random sample of 59 of their drives.
e. What is the variance of the number of defective drives in the sample? Give your answer to four decimal places.

f. What is the standard deviation of the number of defective drives in the sample? Give your answer to four decimal places.

g. Each defective drive costs the company 12 dollars. What is the expected cost to the company for the defective drives in the sample? Give your answer to two decimal places.  

h. Each defective drive costs the company 12 dollars. What is the standard deviation of the cost to the company for the defective drives in the sample? Give your answer to four decimal places.

Explanation / Answer

p = 0.06

n = 59

Question e)

This is Binomial Distribution

Variance = npq = 0.06 *59 = 3.5400

Answer: 3.5400

Question f)

Standard deviation = sqrt (npq) = sqrt (59*0.06*(1-0.06)) = 1.8242

Answer: 1.8242

Question g)

Cost = 12 * 3.54 = $42.48

Answer: $42.48

Question h)

Cost = 12 * 1.8242 = $21.89

Answer: $21.89

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