Question

A food distribution company has employees that order food supplies for local restaurants by predicting sales. The company pulls an SRS of 500 orders and finds that 408 orders were correct. Calculate and interpret a 95% confidence interval for the proportion of all orders that were correct

Answer 1

(0.782, 0.85)

Explanation:

Here

The sample size = 500

Number of favourable cases = 408

Confidence interval = 95%

Proportion of sample = 408/500 = 0.816

Critical value for alpha = 0.05 is z (1-alpha/2) = 1.96

Confidence interval = p -zc * sqrt (p(1-p)/n), p + zc * sqrt (p(1-p)/n)

Substituting the given values we get –

0.816-1.96 * sqrt (0.816(1-0.816)/500), 0.816+1.96 * sqrt (0.816(1-0.816)/500)

(0.782, 0.85)