A pharmaceutical company operates retail pharmacies in 10 easten states. Recentl

Question

A pharmaceutical company operates retail pharmacies in 10 easten states. Recently, the company's internal audit department selected a random sample of 300 prescriptions issued throughout the system. The objective of the sampling was to estimate the average dollar value of all prescriptions issued by the company. The data collected were x $14.28 and s 3.00. Complete parts a and b below. a. Determine the 90% confidence interval estimate for the true average sales value or prescriptions issued by the company. Interpret the interval estimate The 90% confidence interval is S| Round to the nearest cent as needed. Use ascending order.) SD nterpret the interval. Choose the correct answer below. O A. There is a 0.90 probability that the true mean prescription amount is between these two values. O B. The company believes that the true mean prescription amount falls between these two values 90% of the time O C- The company believes with 90% confidence that the true mean prescription amount is between these two amounts. O D. The company believes with 90% confidence that the sample mean prescription amount is between these two amounts. b. One of its retail outlets recently reported that it had monthly revenue of $7,271 from 515 prescriptions. Are such results to be expected? Should that retail outlet be audited? ssuming the opulation mean s at the upper mit of the o confidence interva computed in part a the· pper im 0 the 0% confidence inter a or he expect total month re enue r sri tions would be $ Assuming the population means at the lower limit of the 90% confidence interval computed in part a the lower limit o the 90% confidence interval for the expected total monthly revenue or 515 prescriptions would be $ . Given that this outiet reported sales of $7,271 from 515 prescriptions, there is | | reason to believe that this is out of line. The retail outlet Round to the nearest cent as needed.) be audited.

Explanation / Answer

The statistical software output for this problem is:

One sample T summary confidence interval:
: Mean of population

90% confidence interval results:

Hence,

90% confidence interval will be:

$ 13.99 ------------------- $ 14.57

Interpretation of interval: Option C is correct.

b) $ 7501.38; $ 7207.02; no; should not

Mean Sample Mean Std. Err. DF L. Limit U. Limit 14.28 0.17320508 299 13.994218 14.565782

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