Business Data Model Essay

3124 Words Dec 1st, 2010 13 Pages
Business Decision Models ____________________________________________________________

________________________ Question 1 (10 marks)
Sandra Enright of Techtronics Inc., an electronics supply firm, has been examining the times required for stock pickers to fill orders requested from inventory. She has determined that individual order-filling times approximately follow a normal distribution with a mean value of 3.2 minutes and standard deviation of 68 seconds.
a) What is the probability that a randomly selected order will require more than three minutes? b) What is the probability that a randomly selected order will require less than two minutes? c) What is the
…show more content…
We can then use the spreadsheet command Tools, Data Analysis, Descriptive Statistics to find the summary measures for the data: Note the sample mean (average) daily expenditure is $76.87, and the standard error is $4.254. A 95% confidence interval for the population mean can be found as the sample mean 1.96 * standard errors, or 76.86 1.96 * 4.254, or 76.86 8.34. You could also express this as the range [68.52, 85.20]. The interpretation is that Ms. Turner can be quite sure that the actual true average daily expenditure is somewhere in the range from $68.52 to $86.20 (but it could be anywhere in this range).

b) Let the symbol represent the actual mean daily expenditure of visitors to Kingston. One way to test her assertion is to assume that she is right, and then see if the evidence would cause us to reject this assumption, and therefore conclude that she is wrong. In this framework, we can express Ms. Turner’s statement as the null hypothesis: H0: 100 Versus the alternative hypothesis H1: < 100 (Here, Ms. Turner is evidently making the case that the expenses are justified because visitors contribute so much to Kingston’s economy. Her case would be even more supported if the mean expenditures was > $100, so the format for the null hypothesis above is the correct one for this problem. The hypotheses H0: =

Related Documents