Solve the following problems:
Q1: James Jackson, owner of James Contracting Company, is worried about shipping costs and admin costs that incur with small purchase orders. So they reduce spending in this area, he created an incentive plan for orders over $40 so that hey may encourage customers to lower the # of small orders into bigger orders. This is the amount per transaction for a sample of twenty eight customers:
$10, $15, $20, $25, $15, $17, $41, $50, $5, $9, $12, $14, $35, $18, $17, $28, $29, $11, $11, $43,$54, $7
$8, $16, $13, $18
a) Given the data above, what is the forecast for the amount of the next customer order?
b) If the policy is successful (by creating this incentive plan), will the standard deviation remain unaffected, increase or decrease? Also, will the mean of the distribution remain unaffected, increase or decrease?
Q2: From data on a large sample of sales transactions, a small business owner reports that a 95% confidence interval for the mean profit per transaction is (23.41, 102.59). Use these data to determine the following:
What is the point estimate (best guess ) of the mean and its 95% error margin. Also, find a 90% confidence interval for the mean.