A survey of 50 retail stores revealed that the average price of a microwave was $375 with a sample standard deviation of $20. Assuming the population is normally distributed, what is the 99% confidence interval to estimate the true cost of the microwave?
a. $367.42 to $382.58
b. $315.00 to $415.00
c. $323.40 to $426.60
d. $335.82 to $414.28

True cost of the microwave is in 99% confidence interval:

Explanation:

Relevant data:

As we want to know the 99% confidence interval, the significance level is:

We need to estimate a confidence interval by a two tailed normal bell. Then we have:

The z-value for a probability of 0.005 in a normal standard distribution is 2.576

Confidence interval is given by;:

True cost of the microwave is in 99% confidence interval:

in 2001, dell computer became the world’s largest personal computer vendor, continuing to

gain market share and post profits in an industry struggling with slumping sales and billions of

dollars in losses. dell sells 90% of its pcs directly to the final customer, largely bypassing the

reseller channel that accounts for most of the world’s pc sales. this direct customer relationship

is the key to dell’s business model, and provides distinct advantages over the indirect sales

model. dell’s direct relationship with the customer allows it to tailor its offerings to customer

needs, offer add-on products and services, and use the internet to offer a variety of customer

services. in addition, dell’s pcs are built to customers’ specifications upon receipt of an order,

giving dell additional advantages over indirect pc vendors who must try to forecast demand and

ship products based on those forecasts. dell’s direct sales and build-to-order model has achieved

superior performance in the pc industry in terms of inventory turnover, reduced overhead, cash

conversion, and return on investment (kraemer, et al., 2000).

explanation: