Armstrong Faber produces a standard number-two pencil called Ultra-Lite. Since C

Question

Armstrong Faber produces a standard number-two pencil called Ultra-Lite. Since Chuck Armstrong started Armstrong Faber, sales have grown steadily. With the increase in the price of wood porducts, however, Chuck has been forced to increase the price of the Ultra-Lite pencils. As a result, the demand for Ultra-Lite has been fairly stable over the past 6 years. On the average, Armstrong Faber has sold 515,000 pencils each year. Furthermore, 95% of the time sales have been between 475,000 and 555,000 pencils. It is expected that the sales follow a normal distribution wiht a mean of 515,000 pencils. Estimate the standard deviation of this distribution?

Explanation / Answer

corresponding standard deviation interval for 95% confidence = 1.96 std dev

therefore 1.96 std dev = (95% higher extreme - mean) or (mean - 95% lower extreme)

there fore std deve = ( 555000 - 515000)/1.96 = 20408.163

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