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Constructing Confidence Interval Estimates

1. In his management information systems textbook, Professor David Kroenke raises an interesting point: "If 98% of our market has Internet access, do we have a responsibility to provide non-Internet materials to that other 2%? Suppose that 98% of the customers in your market do have Internet access, and you select a random sample of 500 customers. What is the probability that the sample has

a. Greater than 99% of the customers with internet access?

b. Between 97% and 99% of the customers with Internet access?

c. Fewer than 97% of the customers with Internet access?

2. One operation of a mill is to cut pieces of steel into parts that are used in the frame for front seats in an automobile. The steel is cut with a diamond saw, and the resulting parts must be cut to be within+/- 0.005 inch of the length specified by the automobile company. The measurement reported from a sample of 100 steel parts (stored in Steel) is the difference, in inches, between the actual length of the steel part, as measured by a laser measurement device, and the specified length of the steel part. For example, the first observation, -0.002 represents a steel part that is 0.002 inch shorter than the specified length. Please see attachment for this question.

a. Construct a 95% confidence interval estimate for the population mean difference between the actual length of the steel part and the specified length of the steel part.

b. What assumption must you make about the population distribution in order to construct the confidence interval estimate in (a)?

c. Do you think that the assumption needed in order to construct the confidence interval estimate in (a) is valid? Explain.

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Constructing Confidence Interval Estimates

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