There happen to be many drugs used to treat cancer, and they are quite expensive

Question

There happen to be many drugs used to treat cancer, and they are quite expensive. For the sake of the problem, let's say that a company called BizWeek reported on the cost per
treatment of a drug called Herceptin, which happens to be used in the treatment of breast cancer. The typical treatment costs (in dollars, $)
for Herceptin are provided by a random sample of 10 patients. Here is the sample listed below:

5798, 7446, 5119, 5376, 5495, 5237, 4814, 6578, 3717, 5920

a) For part A, please develop a point estimate of the mean cost per treatment with the drug.

b) For part B, please develop a point estimate of the standard deviation of the cost per treatment with
the drug.

Explanation / Answer

(a). The sample mean is taken as the point estimate of population mean. The sample mean can be calculated using Excel function as follows:

AVERAGE (5798, 7446, 5119, 5376, 5495, 5237, 4814, 6578, 3717, 5920) = 5550

(b). The sample standard deviation is taken as the point estimate of population standard deviation. The sample standard deviation can be calculated using Excel function as follows:

STDEV (5798, 7446, 5119, 5376, 5495, 5237, 4814, 6578, 3717, 5920) = 1003.80

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