Question

You are evaluating four vendors with the following bids:

Vendor A: 33,000
Vendor B:37,000
Vendor C: 28,000
Vendor D:31,000

Based on historical information, there is a 70
1) Vendor A
2) Vendor B
3) Vendor C
4) Vendor D

Answer 1

To ascertain whether the standard deviation of computer pricing is greater than the claimed $25, one must calculate the sample standard deviation and perform a hypothesis test. If the test shows a significant difference at a 5 percent significance level, it indicates greater price variability than stated. For the potential buyer, this knowledge aids in making a savvy purchase decision.

Step-by-step explanation:

The student's question pertains to evaluating whether the standard deviation of the pricing of a specific computer is larger than claimed by the manufacturer using a given set of price data and a significance level of 5 percent. To address this, one would first calculate the sample standard deviation of the given prices and then conduct a hypothesis test to compare the sample standard deviation against the manufacturer's claim of $25. If the calculated sample standard deviation is significantly higher than $25 with a p-value less than 0.05, it suggests that the actual variation in pricing is greater than the manufacturer's claim.

As a potential buyer, the practical conclusion from this analysis would be whether or not the variance in pricing across different stores is indeed as low as the manufacturer asserts. This information can help a buyer make an informed decision about where to purchase the computer or if they might find a better deal than the average price of $1,249 stated by the manufacturer.