Citrus Rental is a popular car rental agency that has a history of having too few cars available, so that its available cars are overdriven. The mean monthly mileage over the years for Citrus cars has been about 1550 miles per month. Recently, though, Citrus purchased thousands of new cars, and the company claims that the average mileage of its cars is now less than in the past. To test this, a random sample of 20 recent mileages of Citrus cars was taken. The mean of these 20 mileages was 1540 miles per month, and the standard deviation was 211 miles per month. Assume that the population of recent monthly mileages of Citrus cars is normally distributed. At the 0.1 level of significance, can it be concluded that the mean recent monthly mileage, µ, of Citrus cars is less than 1550 miles ner month?
Continuous Probability Distributions
Probability distributions are of two types, which are continuous probability distributions and discrete probability distributions. A continuous probability distribution contains an infinite number of values. For example, if time is infinite: you could count from 0 to a trillion seconds, billion seconds, so on indefinitely. A discrete probability distribution consists of only a countable set of possible values.
Normal Distribution
Suppose we had to design a bathroom weighing scale, how would we decide what should be the range of the weighing machine? Would we take the highest recorded human weight in history and use that as the upper limit for our weighing scale? This may not be a great idea as the sensitivity of the scale would get reduced if the range is too large. At the same time, if we keep the upper limit too low, it may not be usable for a large percentage of the population!
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