A coin-operated coffee machine made by BIG Corporation was designed to discharge a mean of eight ounces of coffee per cup. If it dispenses more than that on average, the corporation may lose money, and if it dispenses less, the customers may complain. BIG Corporation would like to estimate the mean amount of coffee,  μ , dispensed per cup by this machine. BIG will choose a random sample of cup amounts dispensed by this machine and use this sample to estimate  μ . Assuming that the standard deviation of cup amounts dispensed by this machine is  0.40  ounces, what is the minimum sample size needed in order for BIG to be  95%  confident that its estimate is within  0.05  ounces of  μ ?   Carry your intermediate computations to at least three decimal places. Write your answer as a whole number (and make sure that it is the minimum whole number that satisfies the requirements).

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Estimation

A new framework of data analysis where the new statistical methods are used for interpreting the results and analyzing the data is known as estimation in statistics.