Method for Business Essay Example | Topics and Well Written Essays - 500 words

Method for Business - Essay Example Interval estimates are often desirable because the estimate of the mean varies from sample to sample. Instead of a single estimate for the mean, a confidence interval generates a lower and upper limit for the mean. The interval estimate gives an indication of how much uncertainty there is in our estimate of the true mean. The narrower the interval, the more precise is our estimate (Snedecor and Cochran, 1989). Confidence limits are expressed in terms of a confidence coefficient. Although the choice of confidence coefficient is somewhat arbitrary, in practice 90%, 95%, and 99% intervals are often used, with 95% being the most commonly used. The first one, the 95% confidence interval, is wider. The intuition is the more the percentage of confidence interval, the wider the boundaries obtained. If we consider the Gauss bell or normal curve, as the point of analysis, when the limits are closer to the mean, the interval confidence is narrower (90% compared to 95%). There is statistical evidence to support that the average number of items processed is 10.5 per minute, with a significance level of 5%.