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1. Increasing medical costs have created a financial crisis among insurance companies that provide medical benefits programs to major corporations. In an attempt to measure the cost of medical benefits to its employees, the personal manager of a California-based manufacturing company randomly surveyed the records of n=64 employees and recorded the medical insurance claims by each chosen employee for the previous 12 months. The result of this survey revealed an average total claim of $964 with standard deviation of $147. a. Estimate u the average annual medical claim per employee and place a 95% bound on the error of estimation b. The insurance carrier for the California-based manufacturing company has informed corporate officials that coverage will be continued only if it can be shown that the average employee claim does not exceed $900. Based on the above information what do you conclude? Test by using a = 0.05. %3D

1. Increasing medical costs have created a financial crisis among insurance companies that provide medical benefits programs to major corporations. In an attempt to measure the cost of medical benefits to its employees, the personal manager of a California-based manufacturing company randomly surveyed the records of n=64 employees and recorded the medical insurance claims by each chosen employee for the previous 12 months. The result of this survey revealed an average total claim of $964 with standard deviation of $147. a. Estimate u the average annual medical claim per employee and place a 95% bound on the error of estimation b. The insurance carrier for the California-based manufacturing company has informed corporate officials that coverage will be continued only if it can be shown that the average employee claim does not exceed $900. Based on the above information what do you conclude? Test by using a = 0.05. %3D

Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
18th Edition
ISBN:9780079039897
Author:Carter
Publisher:Carter
Chapter10: Statistics
Section10.4: Distributions Of Data
Problem 19PFA
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1. Increasing medical costs have created a financial crisis among insurance companies that provide medical benefits programs to major corporations. In an attempt to measure the cost of medical benefits to its employees, the personal manager of a California-based manufacturing company randomly surveyed the records of n=64 employees and recorded the medical insurance elaims by each chosen employee for the previous 12 months. The result of this survey revealed an average total claim of $964 with standard deviation of $147. a. Estimate u the average annual medical claim per employee and place a 95% bound on the error of estimation b. The insurance carrier for the California-based manufacturing company has informed corporate officials that coverage will be continued only if it can be shown that the average employee claim does not exceed $900. Based on the above information what do you conclude? Test by using a = 0.05.
Transcribed Image Text:1. Increasing medical costs have created a financial crisis among insurance companies that provide medical benefits programs to major corporations. In an attempt to measure the cost of medical benefits to its employees, the personal manager of a California-based manufacturing company randomly surveyed the records of n=64 employees and recorded the medical insurance elaims by each chosen employee for the previous 12 months. The result of this survey revealed an average total claim of $964 with standard deviation of $147. a. Estimate u the average annual medical claim per employee and place a 95% bound on the error of estimation b. The insurance carrier for the California-based manufacturing company has informed corporate officials that coverage will be continued only if it can be shown that the average employee claim does not exceed $900. Based on the above information what do you conclude? Test by using a = 0.05.
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