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A delivery truck manager takes a sample of 25 delivery trucks and calculates the sample mean and sample standard deviation for the cost of operation. He asks an employee to construct a 95% confidence interval for the population mean. The employee finds the confidence interval to be €253 to €320. The manager reasons that this interval contains the mean operating cost for the entire fleet of delivery trucks since the sample mean is contained in the interval.
Do you agree with his reasoning?
How would you interpret this confidence interval?
Concerning your answers above, what assumptions did you make (if any)? Does the Central Limit Theorem apply? Why or why not?
How does the concept of confidence interval apply or could apply to your profession?
Data Analysis and Statistical Modeling for Business
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