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90 095 099 010 005 001 2 005 0025 0005 z2 1645

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Unformatted text preview: he following equivalent statement P(x − zα 2 σ σ ≤ µ ≤ x + zα 2 )= 1− α n n The confidence interval Slide 10 The Confidence Interval for µ ( σ is known) s Three commonly used confidence levels Confidence l evel 0.90 0.95 0.99 α 0.10 0.05 0.01 α/ 2 0.05 0.025 0.005 zα/2 1.645 1.96 2.575 Slide 11 The Confidence Interval for µ ( σ is known) s Example • Doll Computer Company delivers computers directly to its customers who order via the Internet. • To reduce inventory costs in its warehouses Doll employs an inventory model, that requires the estimate of the mean demand during lead time. • It is found that lead time demand is normally distributed with a standard deviation of 75 computers per lead time. • Estimate the lead time demand with 95% confidence. Slide 12 The Confidence Interval for µ ( σ is known) s Example – Data – The demand during lead time 235 374 309 499 253 421 361 514 462 369 394 439 348 344 330 261 374 302 466 535 386 316 296 332 334 Slide 13...
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This note was uploaded on 01/17/2010 for the course STATS 2225 taught by Professor Li during the Spring '09 term at Langara.

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