Newt Dimswitch owns a small construction company in Chesapeake, Virginia. He often uses more than one construction crew, and has had a difficult time maintaining records on profit levels, cost controls, and other variables that are necessary in making business decisions. Newt somehow feels that the use of one of his construction crews is not proving as profitable as other crews when sent out on a job. To make some kind of intelligent estimate of profit levels Newt collects cost data for the crew in question for the last 28 jobs it completed.
Completion times, in hours, for the these jobs were 79, 83, 77, 81, 65, 92, 72, 71, 90, 79, 73, 70, 64, 91, 77, 80, 65, 85, 65, 89, 80, 65, 73, 78, 68, 88, 82, and 69. Newt must pay his crew a total of $112 per hour while it is on the job. This crew has bought in revenues on these jobs of $11200, 11700, 11500, 11100, 8300, 11000, 9900, 9400, 11500, 9200, 10200, 9100, 8400, 10300, 10900, 10900, 8300, 9700, 8600, 11200, 11200, 8600, 9200, 10900, 8700, 11100, 10400, and 8400.
Now that Newt has these data, he isn't sure what to do with them. He heard something about confidence intervals could be used to make estimates. Your job is to help poor Newt decide if this crew is profitable.
Note: Profit = Revenue - Cost
1. Enter the completion time data in one column. Use Time as your header. Select Stat > Basic Statistics > 1 - sample t... The variable is Time. This will yield a 95% confidence interval for the mean job completion time for this crew.
2. Determine the 95% confidence interval for cost of a job by this crew. (Hint: use interval from question 1) Show calculations
3. Enter the revenue data in one column. Use Revenue as your header. Select Stat > Basic Statistics > 1 - sample t... The variable is Revenue. this will yield a 95% confidence interval for the mean revenue for this crew.
4. Now, is this crew making a profit? Determine the 95% confidence interval for
profit. (Hint: use intervals from questions 2 & 3). Show calculations.
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