2. In order to determine the average amount spent in November on Amazon.com a random sample of 144 Amazon accounts were selected. The sample mean amount spent in November was $250 with a standard deviation of $25. Assuming that the population standard deviation is unknown, what is a 95% confidence interval for the population mean amount spent on Amazon.com in November?
In our second assumption, instead of using the cost of goods per cases in 1986, we try to use the percentage it counts in the total expenses which is 50.4% and to find the sales needed to break-even. The detail of the calculation is shown in the answer for questions d. The result is that 95,635, a little bit higher than the estimated sales of 90,000.
C. Using a table to compare the difference between problem #1 and problem #2, respectively, we can see the obvious differences between the optimal stocking quantity and daily expected profit figures.
Under either scenario, there is a 75% chance that the company will achieve the $4 million target profit. When demand is 150,000, then the profit is going to be below the $4 million mark in either case. There is a 25% that the demand will be 150,000. There is a 75% chance that the demand is going to be 180,000 or higher. At 180,000 or higher, the company would generate a profit in excess of $4 million under either scenario. Therefore, there is a 75% chance that the company is
values under the curve lie within one standard deviation of the mean and 95% lie within two standard deviations3. This is good for intervallic continuous variables.