Continuous Random Variables

You are a business analyst working in the mortgage banking industry. Your manager asked you to analyze
staffing needs for the Foreclosure Department. The manager requested a detailed report because she is not
familiar with statistics and computations needed to make conclusions. Hence, your report must be written in a
descriptive manner that defines and explains key concepts, categories, and processes rather than just
presenting math calculation. You should explain each concept, discuss advantages and disadvantages, and
justify your recommendations. The expectation is that the report is an MS Word document that is 5 pages long.
The following is what the manager gave you:
At the beginning of this year, the portfolio included 100,000 loans in various stages of the foreclosure process.
In the last 4 months, there has been a significant increase in the portfolio, as presented in the following table:
Month January February March April
% increase 5% 10% 15% 20%
Total# of loans 105000 115500 132825 159390
The department currently employs 50 employees and has a huge backlog. The department quickly needs to
hire more people, but the management does not know how many. This report should help resolve this problem
Please include the following information in your report:
Compare and contrast various sampling approaches (e.g., large sample, small sample, convenience sample,
and so forth). Apprise each of them, and select the one that you intend to use. Justify your recommendation.
Explain how you are going to overcome challenges associated with sampling biases. In addition, what
assurances are taken to address ethics problems in the experimental design that may arise if you need to lay
off employees in your department to replace them with offshore, less expensive employees, assuming that you
do not want to see your friends losing their jobs?

Sample Solution