Many drugs used to treat cancer are expensive. BusinessWeek reported on the cost

Question

Many drugs used to treat cancer are expensive. BusinessWeek reported on the cost per treatment of Herceptin, a drug used to treat breast cancer (BusinessWeek, January 30, 2006). Typical treatment costs (in dollars) for Herceptin are provided by a simple random sample of 10 patients. 4,384 5,592 2,734 4,908 4,489 4,784 6,459 4,103 4,236 3,801 Develop a point estimate of the mean cost per treatment with Herceptin. Develop a point estimate of the standard deviation of the cost per treatment with Herceptin (to 1 decimal).

Explanation / Answer

1.
Point of estimate = 4549

2.
Step 1: Add them up
4384 + 5592 + 2734 + 4908 + 4489 + 4784 + 6459 + 4103 + 4236 + 3801 = 45490

Step 2: Square your answer
45490*45490 =2069340100
…and divide by the number of items. We have 10 items , 2069340100/10 = 206934010
Set this number aside for a moment.

Step 3: Take your set of original numbers from Step 1, and square them individually this time
4384^2 + 5592^2 + 2734^2 + 4908^2 + 4489^2 + 4784^2 + 6459^2 + 4103^2 + 4236^2 + 3801^2 = 216035504

Step 4: Subtract the amount in Step 2 from the amount in Step 3
216035504 - 206934010 = 9101494

Step 5: Subtract 1 from the number of items in your data set, 10 - 1 = 9

Step 6: Divide the number in Step 4 by the number in Step 5. This gives you the variance
9101494 / 9 = 1011277.1111

Step 7: Take the square root of your answer from Step 6. This gives you the standard deviation
1005.6227

Point of s.d = 1005.6227

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