The firm you work for has a rather poorly-thought-out policy that any estimations

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  1. The firm you work for has a rather poorly-thought-out policy that any estimations of the cost of a certain activity must be within a margin of error of no more than ± 10% of the estimated cost. (The company doesn’t care about the confidence level of the margin of error, only that it be such that the above rule is upheld.) A project that you’re working on has an average cost of $10,000, which was derived from a sample of all 11 known observations with a known standard deviation of 1,869. To comply with your company’s policy, what is the highest confidence level you may use to construct this margin of error? (Estimate this by using the chart above to give the two points which it must fall in between, or the extreme point if it is greater/less than all those given.)
  2. You work in an IT firm that specializes in a certain sort of information retrieval for corporations. Your boss has assigned you the task of estimating how long a certain sort of advanced retrieval takes on average. Since a major business is seriously considering an account with your company, your boss wants you to be “99 percent sure” that your estimate falls within a 10-point total spread that you will give him. The variance of these sorts of retrievals is known to be 4800. What is the least number of trials of the system that you would have to run to complete your task (using the techniques that this test covers)?

 

  • 6 years ago
The firm you work for has a rather poorly-thought-out policy that any estimations
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