Chap 12
12.16 a= 3502.576(100/) = 35011.52; LCL = 338.48, UCL = 361.52
Here, comes from the table on p. 262 in the text, using infinite degrees of freedom as an
approximation. A more accurate value, 2.586, can be obtained directly using TINV(0.01, 499)
in Excel.
b = 350 2.575(100/) = 350 11.52; LCL = 338.48, UCL = 361.52
c With n = 500 the student t distribution with 499 degrees of freedom is almost identical to the standard normal distribution.
12.22 = 24,0512.145(17,386/) = 24,0519,628; LCL = 14,422, UCL = 33,680
12.30= 4.66 2.576(2.37/) = 4.66 .39; LCL = 4.27, UCL = 5.05
Total number: LCL = 100 million (4.27) = 427 million, UCL = 100 million (5.05) = 505 million
12.34= 2.67 1.973(2.50/) = 2.67 .36; LCL = 2.31, UCL = 3.03
12.88 = .0975 1.96= .0975 .0130; LCL = .0845,
UCL = .1105
Number: LCL = 100 million (.0845) = 8.45 million, UCL = 100 million (.1105) = 11.05 million
12.92 = .10771.96= .1077 .0337; LCL = .0740,
UCL = .1414; Market segment size: LCL = 35.6 million(.0740) = 2.634 million,
UCL = 35.6 million(.1414) = 5.034 million
Case 12.2
Estimated Mean
Number of Cans Current
per Student Revenue Cost Profit Profit Net
LCL = 1.218 $1,187,550 $487,200 $500,350 $855,910 $–355,560
UCL = 1.414 1,378,650 565,600 613,050 1,071,290 –458,240
Coke would not sign the exclusivity agreement. Coke is expected to lose from the exclusivity agreement because they currently have a much larger share of the market and would not gain by paying for exclusivity.
73,730,628
Case 12.4
a 95% confidence interval estimate of the mean medical costs for each of the four age categories:
b Estimated annual costs for 2003
Estimate of meanEstimate of total (1,000s)
Age category Number (1,000s) LCL UCL LCL UCL
45 to 647,9321,7841,87714,150,68814,888,364
65 to 742,1874,3814,607 9,581,24710,075,509
75 to 841,4237,8768,27211,207,54811,771,056
85 and over 45015,57216,342 7,007,400 7,353,900
Total11,99241,946,88344,088,829
Estimated annual costs for 2006
Estimate of meanEstimate of total (1,000s)
Age category Number (1,000s) LCL UCL LCL UCL
45 to 648,6781,7841,87715,481,55216,288,606
65 to 742,2534,3814,607 9,870,39310,379,571
75 to 841,4867,8768,27211,703,73712,292,192
85 and over 56315,57216,342 8,767,0369,200,546
Total12,98045,822,71748,160,915
Estimated annual costs for 20011
Estimate of meanEstimate of total (1,000s)
Age category Number (1,000s) LCL UCL LCL UCL
45 to 649,6491,7841,87717,213,81618,111,173
65 to 742,6094,3814,60711,430,02912,019,663
75 to 841,5467,8768,27212,176,29612,788,512
85 and over 69215,57216,34210,775,82411,308,664
Total14,49651,595,96554,228,012
Estimated annual costs for 2016
Estimate of meanEstimate of total (1,000s)
Age category Number (1,000s) LCL UCL LCL UCL
45 to 649,8831,7841,87717,631,27218,550,391
65 to 743,2734,3814,60714,339,01315,078,711
75 to 841,6457,8768,27212,956,02013,607,440
85 and over 78415,57216,34212,208,44812,812,128
Total15,58557,134,75360,048,670
Estimated annual costs for 2021
Estimate of meanEstimate of total (1,000s)
Age category Number (1,000s) LCL UCL LCL UCL
45 to 649,8401,7841,87717,554,56018,469,680
65 to 743,8864,3814,60717,024,56617,902,802
75 to 841,9387,8768,27215,263,68816,031,136
85 and over 84615,57216,34213,173,91213,825,332
Total16,51063,016,72666,228,950
Estimated annual costs for 2026
Estimate of meanEstimate of total (1,000s)
Age category Number (1,000s) LCL UCL LCL UCL
45 to 649,6361,7841,87717,190,62418,068,772
65 to 744,3644,3814,60719,118,68420,104,948
75 to 842,4597,8768,27219,367,08420,340,848
85 and over 93015,57216,34214,481,96015,198,060
Total17,38970,158,352
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