Answered: The manager of a department store…

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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The manager of a department store considers establishing a new billing system for
the store’s credit customers. After a thorough analysis, she determines that the new
system will be cost effective only if the mean monthly account is more than $170.
A sample of 400 monthly accounts is drawn, for which the sample mean is $178. The
manager knows that the accounts are approximately normally distributed with a
standard deviation of $65.
1) Can the managers conclude that the new system will be cost effective with a 5%
significance level? Explain in detail your answer.
2) What is the smallest significance level at which the manager can reject the
statement that the new system is not cost-effective? Explain in detail your answer

Features Features Normal distribution is characterized by two parameters, mean (µ) and standard deviation (σ). When graphed, the mean represents the center of the bell curve and the graph is perfectly symmetric about the center. The mean, median, and mode are all equal for a normal distribution. The standard deviation measures the data's spread from the center. The higher the standard deviation, the more the data is spread out and the flatter the bell curve looks. Variance is another commonly used measure of the spread of the distribution and is equal to the square of the standard deviation.

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