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Confidence Interval Calculations

Assume you are a tire manufacturer and want to determine what the tread life of a new line of tires is. A sample of 100 tires are run to failure and the average mileage is computed to be 55,000 miles with a standard deviation of 1000 miles.

Compute the 95% confidence interval on the population mean. Interpret the interval. What is the "best" number to use? What number might your sales force tend to use? Why?

Your company typically guarantees similar type of tires to provide 55,000 miles on average. Would you conclude that this line of tires meets that standard? Why or why not?

Solution Summary

This solution computes a 95% confidence interval and interprets it, explaining how to choose a population mean.