Use the fact that the mean of a geometric distribution is μ = 1/p and the variance is σ2 = q/p2.
A company assumes that 0.5% of the paychecks for a year were calculated incorrectly. The company has 200 employees that examines the payroll records from one month.
•Find the mean, variance, and standard deviation..
•How many employees payroll records would you expect to examine before finding one with an error?
Thank you for the opportunity to help you with your question! the solution is as such:
A.) Mean: 1/p= 1 / 0.005 = 200 Variance: 1 - 0.005 / 0.0052 = 39601 Standard Deviation: Square root of variance 39601 = 199
B.) This brings us back to the mean where our outcome for the example was 200 this also represents the number of payroll records that would be examined before finding one with an error.
As for interpretation we can say from the results that on an average there are 200 paychecks for year that were calculated incorrectly with standard deviations 199.
Please let me know if you need any clarification. I'm always happy to answer your questions.awaiting a positive feedback. It was lovely helping you. Looking forward to help you again. A positive feedback awaited thank you.