Question

Tom is a supermarket manager. He reviewed transaction time when a customer paid by credit card. The

transaction time is normally distribution with mean of 20 seconds and standard deviation of 5 seconds.
(a) For a group of 6 customers, find the probability that 5 customers can finish the transaction within 20
seconds. (Assume that the transaction times of customers are independent.)
After discussion with the network provider, he will upgrade the network so that it is promised that each
transaction time can be reduced by 15%.
(b) Use Y to denote the transaction time after network upgrade. Find the mean and standard deviation of Y.
(c) Calculate the 97th percentile of Y. (i.e. find the value of t such that P(Y (d) Compare with the transaction time before upgrade, is it (I) a higher proportion, (II) a lower proportion,
or (III) the same proportion of all customers can finish the transaction within 20 seconds? (Just state
your answer, no calculation is needed.)

Answer 1

Explanation:

(a) We can use the standard normal distribution to solve this problem. We first need to standardize the distribution by using the formula:

Z = (X - μ) / σ

where X is the transaction time, μ is the mean, σ is the standard deviation, and Z is the standard normal variable.

For 5 customers to finish the transaction within 20 seconds, we need to find the probability that 5 out of 6 customers have a transaction time less than or equal to 20 seconds. We can use the binomial distribution to find this probability:

P(X = 5) = 6C5 * (0.5)^5 * (0.5)^1 = 0.2344

where 6C5 is the number of ways to choose 5 customers out of 6.

(b) After the network upgrade, the transaction time will be reduced by 15%, so the new mean and standard deviation are:

μ' = 0.85 * μ = 17 seconds

σ' = 0.85 * σ = 4.25 seconds

(c) To find the 97th percentile of Y, we need to find the value of t such that P(Y ≤ t) = 0.97. Since Y is a normally distributed variable, we can standardize it using the formula:

Z = (Y - μ') / σ'

Then we can find the value of t using a standard normal distribution table or calculator:

Z = 1.88

t = μ' + Z * σ' = 17 + 1.88 * 4.25 = 25.99 seconds

(d) After the upgrade, a higher proportion of customers can finish the transaction within 20 seconds. This is because the mean transaction time has decreased from 20 seconds to 17 seconds, which means that more customers will have a transaction time less than or equal to 20 seconds.