Question

A department store, on average, has daily sales of $21,000. The standard deviation of sales is $3600. On Tuesday, the store sold $16,230 worth of goods. Find Tuesday's z score. What is the percentile rank of sales for this day

Answer 1

Tuesday's z-score was of -1.325.

The percentile rank of sales for this day was the 9.25th percentile.

Explanation:

Z-score:

In a set with mean
`\mu` and standard deviation
`\sigma`, the z-score of a measure X is given by:

`Z = (X - \mu)/(\sigma)`

The Z-score measures how many standard deviations the measure is from the mean. After finding the Z-score, we look at the z-score table and find the p-value associated with this z-score. This p-value is the probability that the value of the measure is smaller than X, that is, the percentile of X. Subtracting 1 by the p-value, we get the probability that the value of the measure is greater than X.

A department store, on average, has daily sales of $21,000. The standard deviation of sales is $3600.

This means that
`\mu = 21000, \sigma = 3600`

On Tuesday, the store sold $16,230 worth of goods. Find Tuesday's z score.

This is Z when X = 16230. So

`Z = (X - \mu)/(\sigma)`

`Z = (16230 - 21000)/(3600)`

`Z = -1.325`

Tuesday's z-score was of -1.325.

What is the percentile rank of sales for this day

This is the p-value of Z = -1.325.

Looking at the z-table, this is of 0.0925, and thus:

The percentile rank of sales for this day was the 9.25th percentile.