Discuss the following:
My example is not related to my particular business, company, or industry, however being an annual pass holder to the Walt Disney World parks, the first thing that came to mind when reading the question(s) was an example about waiting in lines at the Magic Kingdom. Every time I enter the park, I try to guess whether or not the lines will be long. Applying this to the concept of confidence interval, one could estimate the average wait time for rides at the Magic Kingdom. The population mean that would be estimated is the average amount of time all park attendees waited to ride the rides at the Magic Kingdom. The sample that would be used is the amount of time park attendees waited for a specific ride on a specific day (Saturday for example).
The confidence interval would be calculated by finding the sample mean, confidence level of the sample mean, the total sample size, and the population standard deviation. Using this information, the average range of how long it takes to get on a ride can be determined. So say for instance we knew that the sample mean was 30 minutes with a confidence level of 90%, then if we knew the total sample size and the population standard deviation, we could determine that that the average wait time would be between 20 - 45 minutes. This information could be very useful for upper management at the Magic Kingdom. It can help them to determine the peak days/times for park attendance and determine staffing numbers accordingly. It can also help management come up with different tactics to help alleviate long wait times, such as scheduling parades or other shows during peak times of the day to drive traffic away from the rides and help lower the average wait time.
The confidence level can influence decision making because the lower the confidence level, the higher the significance level, which means that the probability will be higher that the confidence interval will not contain the true population average. Having a higher confidence level can give management a more precise range of the true population average.