Managing for Quality and Performance Excellence 10th Edition by James Evans ,William Lindsay

Exercise 4

Note: Data sets for many problems in this chapter are available in the Excel workbook C06Data.xlsx on the Student Companion Site. Click on the appropriate worksheet tab as noted in the problem (e.g., Prob. 6-1) to access the data. In addition, the spreadsheet templates illustrated in the chapter are also available to aid in solving many of these problems.
Auditors at the Valles Verdes Partners, P.S.C. took a sample of 150 accounts payable bills, as shown in the table found in the Excel worksheet Prob. 6-2 in the Excel workbook C06Data.xlsx.
a. Find the proportion of the accounts payable in the sample that are classified as overdue by using the Excel COUNTIF function.
b. If an auditor takes a random sample of only 15 accounts from this population, assuming that they follow a binomial distribution, what is the probability that: (i) exactly 6 bills will be overdue? (ii) 5 or fewer bills will be overdue? (iii) 7 or more bills will be overdue? Use the binomial probability distribution formula and verify your result using Excel Binomial spreadsheet template.