Question

Suppose a fast-food restaurant wishes to estimate average sales volume for a new menu item. The restaurant has analyzed the sales of the item at a similar outlet and observed the following results: __ X 500 (mean daily sales) S 100 (standard deviation of sample) n 25 (sample size) The restaurant manager wants to know into what range the mean daily sales should fall 95 percent of the time. Perform this calculation.

Answer 1

From the data of the other outlet, we assume that the daily sales are normally distributed with mean 500 and s.d.=100.
For a normally distributed variable, 95% of the results will be within 1.96*sd (=196 in this case) of the mean.
So the daily sales will be between 304 and 696, 95% of the days.



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