The purpose of the assignment is to develop students’ abilities in using datasets to apply the concepts of sampling distributions and confidence intervals to make management decisions.
Resources: Microsoft Excel®, The Payment Time Case Study, The Payment Time Case Data Set
Review the Payment Time Case Study and Data Set.
Using Excel, determine the following concerning the new billing system:
- Assuming the standard deviation of the payment times for all payments is 4.2 days, construct a 95% confidence interval estimate to determine whether the new billing system was effective. State the interpretation of the 95% confidence interval and state whether or not the new billing system was effective.
- Using the 99% confidence interval, can we be 99% confident that the new billing system was effective?
- If the population mean payment time is 19.5 days, what is the probability of observing a sample mean payment time of 65 invoices less than or equal to 18.1077 days?