Answered: Junk mail Direct mail advertisers send…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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Question

Junk mail Direct mail advertisers send solicitations
(a.k.a. “junk mail”) to thousands of potential customers
in the hope that some will buy the company’s product.

The acceptance rate is usually quite low. Suppose a com-
pany wants to test the response to a new flyer, and sends

it to 1000 people randomly selected from their mailing
list of over 200,000 people. They get orders from 123 of
the recipients.
a) Create a 90% confidence interval for the percentage of
people the company contacts who may buy something.
b) Explain what this interval means.
c) Explain what “90% confidence” means.
d) The company must decide whether to now do a mass
mailing. The mailing won’t be cost-effective unless it

produces at least a 5% return. What does your confi-
dence interval suggest? Explain.

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