MAT 240 Week 6 Discussion | Assignment Help | southern-new-hampshire-university
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- 24 Feb 2021
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MAT 240 Week 6 Discussion | Assignment Help | southern-new-hampshire-university
6-3 Discussion: Confidence Intervals
The B&K Real
Estate Company sells homes and is currently serving the Southeast region. It
has recently expanded to cover the Northeast states. The B&K realtors are
excited to now cover the entire East Coast and are working to prepare their
southern agents to expand their reach to the Northeast.
B&K has
hired your company to analyze the Northeast home listing prices in order to
give information to their agents about the mean listing price at 95%
confidence. Your company offers two analysis packages: one based on a sample
size of 100 listings, and another based on a sample size of 1,000 listings.
Because there is an additional cost for data collection, your company charges
more for the package with 1,000 listings than for the package with 100
listings.
Sample size of 100 listings:
·
95% confidence interval for the mean of the
Northeast house listing price has a margin of error of $25,000
·
Cost for service to B&K: $2,000
Sample size of 1,000 listings:
·
95% confidence interval for the mean of the
Northeast house listing price has a margin of error of $8,000
·
Cost for service to B&K: $10,000
The B&K
management team does not understand the tradeoff between confidence level,
sample size, and margin of error. B&K would like you to come back with your
recommendation of the sample size that would provide the sales agents with the
best understanding of northeast home prices at the lowest cost for service to B&K.
In other words,
which option is preferable?
·
Spending more on data collection and having a
smaller margin of error
·
Spending less on data collection and having a
larger margin of error
·
Choosing an option somewhere in the middle
For your initial
post:
·
Formulate a recommendation and write a confidence
statement in the context of this scenario. For the purposes of writing your
confidence statement, assume the sample mean house listing price is $310,000
for both packages. “I am [#] % confident the true mean . . . [in context].”
·
Explain the factors that went into your
recommendation, including a discussion of the margin of error
For your
response posts to your peers, choose two different confidence intervals for
your responses. Do you think the agents would prefer a different confidence
interval than their management? What advantages and disadvantages would there
be in having different confidence intervals for the agents? Explain your
thought process and reasoning in your response.