S2 June 2007 Q7

7.

(a)
(i) Write down two conditions for \(X \sim \mathrm{Bin}(n, p)\) to be approximated by a normal distribution \(Y \sim \mathrm{N}(\mu, \sigma^2)\). (2)
(ii) Write down the mean and variance of this normal approximation in terms of \(n\) and \(p\). (2)

A factory manufactures 2000 DVDs every day. It is known that 3% of DVDs are faulty.

(b) Using a normal approximation, estimate the probability that at least 40 faulty DVDs are produced in one day. (5)

The quality control system in the factory identifies and destroys every faulty DVD at the end of the manufacturing process. It costs £0.70 to manufacture a DVD and the factory sells non-faulty DVDs for £11.

(c) Find the expected profit made by the factory per day. (3)