A confidence interval is a “range of plausible values” (Lock, p. 180) that will

Question

A confidence interval is a “range of plausible values” (Lock, p. 180) that will “capture the parameter for a proportion of all samples” (p. 180).

Identify situation where you might want to make an estimate. For example, you might want to estimate the mean dollar amount spent on surgical supplies. In your example, what is the population mean you are estimating? What is the sample you will use? How will you calculate the confidence interval? How would you use that information in a proposal to the hospital administration? How does the confidence level influence the decision?

Explanation / Answer

While estimating mean dollar amount spent on surgical supplies.

Population mean being estimated is the mean of the amount spent on surgical supplies by the population altogether.

Sample to be used is the data collected from a hospital on their surgical supplies.

To calculate confidence interval, normal distribution is assumed and then the confidence interval is sample mean plus/minus the margin of error.

We will propose to the hospital to keep this amount at least for the surgical supplies needed for the next upcoming year.

The upper limit of the confidence interval means the amount that can be maximum be needed,

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