SOLUTION: 2. A stationery store wants to estimate the mean retail value of greeting cards that it has in its inventory. A random sample of 20 greeting cards indicates an average value of $1.

Question 343876: 2. A stationery store wants to estimate the mean retail value of greeting cards that it has in its inventory. A random sample of 20 greeting cards indicates an average value of $1.67 and a standard deviation of $0.32.
a. Assuming a normal distribution, set up a 95% confidence interval estimate of the mean value of all greeting cards in the store,s inventory.
b. How might the results obtained in (a) be useful in assisting the store owner to estimate the total value of her inventory?
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
A stationery store wants to estimate the mean retail value of greeting cards that it has in its inventory. A random sample of 20 greeting cards indicates an average value of $1.67 and a standard deviation of $0.32.
a. Assuming a normal distribution, set up a 95% confidence interval estimate of the mean value of all greeting cards in the store,s inventory.
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x-bar = 1.67
E = (1.96)(0.32/sqrt(20)) = 0.1402
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95% CI: 1.67-0.1402 < u < 1.67+0.1402
95% CI: 1.5298 < u < 1.8102
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b. How might the results obtained in (a) be useful in assisting the store owner to estimate the total value of her inventory?
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Assuming there are "x" cards in the store the inventory value
is between $1.53x and $1.81x.
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Cheers,
Stan H.
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