Question

3. A dealer in recycled paper places empty trailers at various sites; these are gradually filled by individuals who bring in old newspapers and the like. The trailers are picked up (and replaced by empties) on several schedules. One such schedule involves pickup every second week. This schedule is viable if the average amount of recycled paper is more than 1600 cubic feet per two-week period. The dealer’s records for 26 two-week periods show the following volumes (in cubic feet) at a particular site: 1660 1820 1590 1440 1730 1680 1750 1720 1900 1690 1850 1770 1410 1570 1700 1900 1800 1770 2010 1580 1620 1690 1510 1420 1400 1705 a. Please construct and interpret the 92% and 98% confidence intervals for the population mean amount of recycled paper clearly showing all the necessary steps. What would be the probability that the population mean amount of paper could be greater than the upper limit of the 92% confidence interval? Please explain which confidence interval is wider and why. What do you think will happen to the margins of error and the confidence intervals if the sample size was to be increased to 35 observations? Please justify your answer. [5 points] b. Based on the confidence intervals you have constructed do you think the proposed schedule is viable? Please explain how arrived at your answer. [2 points] c. Using the given data and at 2% level of significance, please test whether the proposed schedule is viable. Show the necessary steps and explain your conclusion. Is your test result consistent with the conclusion you arrived at based on the 98% confidence interval you constructed under question (a) above? Please explain.

Answer 1