General Hospital\'s patient account division has compiled data on the age of acc

Question

General Hospital's patient account division has compiled data on the age of accounts receivable. The data collected indicate that the age of the accounts follows a normal distribution with a mean of 30 days and a standard deviation of 12 days. The hospital administrator is interested in sending reminder letters to the holders of the oldest 20% of the accounts. About how many days old should an account be before a reminder letter is sent? Correct answer = 40 days (show step by step how to solve the problem)

Explanation / Answer

First, we get the z score from the given left tailed area. As          
          
Left tailed area = 1 - 0.20 =   0.80      
          
Then, using table or technology,          
          
z =    0.841621234      
          
As x = u + z * s,          
          
where          
          
u = mean =    30      
z = the critical z score =    0.841621234      
s = standard deviation =    12      
          
Then          
          
x = critical value =    40.0994548 = 40 [ANSWER]

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