Statistics and Research Methodology Homework (1) Instructions:

Fall 2012

The assignment is due Tuesday October 16, 2012 in or before the class. The solutions must be typed and relevant Excel output should be embedded in the solutions. Handwritten solutions will not be graded. Late submissions will not be accepted. You can work in groups of at most five and submit one solution.

1. Given the following sales data for weekly gross receipts of a random sample of 36 restaurants in an international fast food chain (in $1000): 5 8 9 9 17 18 19 23 25 28 29 29 31 33 35 38 39 41 43 45 48 49 51 54 55 56 58 59 59 73 74 75 76 78 79 79 (a) Find the sample mean, standard deviation and the five-number summary of this data. (b) Display the weekly sales using a box-and-whisker plot. Describe the distribution of the weekly sales. (c) Calculate a 95% confidence interval for the average weekly sales of all 13,000 plus restaurants in this chain. (d) Based on your answer to part (c), do you believe you have strong evidence to indicate that the average weekly sales of restaurants in this chain is significantly higher than $7,000. (e) How large a sample would be required to estimate the average weekly sales within $5000 at 95% confidence. 2. Although airline schedules and cost are important factors for business travelers when choosing an airline carrier, a USA Today survey found that business travelers list an airlines frequent flyer program as the most important factor. From a sample of 1993 business travelers who responded to the survey, 618 listed a frequent flyer program as the most important factor. (a) Develop a 95% confidence interval for the proportion of the population of business travelers who believe a frequent flyer program is the most important factor when choosing an airline carrier? (b) How large a sample would be required to report the margin of error of 0.01 at 95% confidence? Would you recommend that USA Today attempt to provide this degree of precision? Why or why not? (c) How large a sample would be required to report the margin of error of 0.01 at 95% confidence assuming that no prior information is available about the proportion of interest?