Question

The owner of a local health food store recently started a new ad campaign to attract more business and wants to test whether average daily sales have increased. Historically average daily sales were approximately $2,700. After the ad campaign, the owner took another random sample of forty-five days and found that average daily sales were $2,984 with a standard deviation of approximately $585. Calculate the upper bound of the 95% range of likely sample means for this one-sided hypothesis test using the CONFIDENCE.NORM function.

Answer 1

The upper limit of the confidence interval is 3127 $/day.

Explanation:

With the new sample we can estimate the one-sided 95% confidence interval.

For this interval (one sided, 95% of confidence), z=1.64.

The number of observations (n) is 45 days.

The mean is 2984 and the standard deviation is 585.

We can estimate the upper limit of the confidence interval as

`UL=X+z*s/√(n) \\UL = 2984 + 1.64*585/√(45)=2984+ 959.4/6.708=2984+143=3127`