A meat-processing company in the Midwest produces and markets apackage of eight
ID: 2954595 • Letter: A
Question
A meat-processing company in the Midwest produces and markets apackage of eight small sausage sandwiches. The product isnationally distributed, and the company is interested in knowingthe average retail price charged for this item in stores across thecountry. The company cannot justify a national census to generatethis information. Based on the company information system’slist of all retailers who carry the product, a researcher for thecompany contacts 36 of these retailers and ascertains the sellingprices for the product. Use the following price data and apopulation standard deviation of 0.113 to determine a pointestimate for the national retail price of the product. Construct a90% confidence interval to estimate this price.
The tolerance is +/- 0.005.
$2.23 $2.11 $2.12 $2.20 $2.17 $2.10 2.16 2.31 1.98 2.17 2.14 1.82 2.12 2.07 2.17 2.30 2.29 2.19 2.01 2.24 2.18 2.18 2.32 2.02 1.99 1.87 2.09 2.22 2.15 2.19 2.23 2.10 2.08 2.05 2.16 2.26Explanation / Answer
Given n=36, xbar= 2.139, s=0.113 (based on the data) =0.1, Z(0.05)=1.645 (check normal table) The 90% CI is xbar ± Z*s/n --> 2.139 ± 1.645*0.113/sqrt(36) --> ( 2.108, 2.169 )
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