In a study conducted by American Express, corporate clients were surveyed to determine the extent to which hotel room rates quoted by central reservation systems differ from the rates negotiated by the companies. The study found that the mean overcharge by hotels was $11.35 per night. Suppose a follow-up study was done in which a random sample of 30 corporate hotel bookings was analyzed. Only those cases where an error occurred were included in the study. The following data show the amounts by which the quoted rate differs from the negotiated rate. Positive values indicate an overcharge and negative values indicate an undercharge.
a. Compute a 95% confidence interval estimate for the mean error in hotel charges. Interpret the confidence interval estimate.
b. Based on the interval computed in apart a, do these sample data tend to support the results of the America Express study? Explain.
From the given data. first we compute sample mean and sample standard deviation. Sample mean(xbar) = 9.1753 sample standard... View the full answer