Answer to Question #51392 in Statistics and Probability for Mya Fast

Question

A company assumes that 0.5% of the paychecks for a month was calculated incorrectly.
The company has 350 employees and exami
ned the payroll records from one month

Answer 1

A company assumes that 0.5% of the paychecks for a month were calculated incorrectly. The company has 350 employees and examined the payroll records from one month.
(a) Define the variable of interest.
The variable of interest in this case is the number of employees.
(b) State clearly the appropriate distribution and its parameters.
There is a linear distribution. The main parameters are the number of employees and the error rate.
(c) Find the probability of finding one paycheck that was calculated incorrectly.
The probability that one paycheck was calculated incorrectly is P = 0.005
(d) In a given month, how many employees payroll would you expect to be calculated incorrectly?
If a company assumes that 0.5% of the paychecks for a month was calculated incorrectly and the company has 350 employees and examined the payroll records from one month, then 350*0.005 = 1.75 = 2 employees will receive the incorrect paycheck.