3. Alcart Computer Services, Inc., a small telecommunications services company,

Question

3. Alcart Computer Services, Inc., a small telecommunications services company, located in New York, wants to determine the average Central Processing Unit (CPU) time of their teleprocessing transactions as customer requests for this information have increased. A sample of 64 transactions selected yielded a mean of 6 seconds with a standard deviation of 0.8 seconds a. b. Determine a 98% confidence interval for the average CPU time. Is the determined confidence interval sufficiently meaningful to satisfy customer concerns? How would you define sufficiently meaningful? Discuss.

Explanation / Answer

Ans:

a)

n>30,so we can use z multiplier.

z value for 98% CI is 2.33

98% confidence interval for mean CPU time

=6+/-2.33*0.8/sqrt(64)

=6+/-2.33*0.1

=6+/-0.233

=(5.767, 6.233)

b)

Suppose hypothized population mean CPU time is 5.5 sec

As, 98% CI have both limits above 5.5,it means that we are 98% confident that poplation mean CPU time will be between 5.767 and 6.233,so we have sufficient evidence that mean CPU time has increased.

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