Modern Vehicles Company came up with two different plans for the next financial year. Plan Y: Increase vehicle production by 5%
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Answer:
If 24 items are picked at random, 8% of the time their mean life will be less than 5.156 years.
Step-by-step explanation:
To solve this question, we have to understand the normal probability distribution and the central limit theorem.
Normal probability distribution:
Problems of normally distributed samples are solved using the z-score formula.
In a set with mean and standard deviation
, the zscore of a measure X is given by:
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 pvalue, we get the probability that the value of the measure is greater than X.
Central limit theorem:
The Central Limit Theorem estabilishes that, for a random variable X, with mean and standard deviation
, the sample means with size n of at least 30 can be approximated to a normal distribution with mean
and standard deviation
In this problem, we have that:
If 24 items are picked at random, 8% of the time their mean life will be less than how many years?
This is the value of X when Z has a pvalue of 0.08. So it is X when Z = -1.405.
By the Central Limit Theorem
If 24 items are picked at random, 8% of the time their mean life will be less than 5.156 years.