Question 129780
The manufacturer of Winston Tire Company (WTC) claims its new tires last for an average 45k miles. An independent testing agency road-tested 135 tires to substantiate the claim made by WTC. The sample mean was 44k miles with a sample standard deviation of 4k miles. Using 1% significance, determine if there is a reason to reject the claim made by WTC and conclude that the tires last for less than 45k miles.
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- what is 'n'
Ans: n is the sample size; in your problem that would be 135
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- calculate the confidence intervals (using 44k miles as your mean) (1% significance means 99% confidence) 
Ans: The standard error is E= 2.575(4/sqrt(135)) = 7.48..
C.I. is (44-E,44+E)
C.I. is (36.52,51.48)
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Fail to reject the claim since 45K is in the 1% confidence interval.
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Cheers,
Stan H.
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