Dick Hoover, owner of Modern Office Equipment, is concerned about freight costs and clerical costs incurred on small orders. In an effort to reduce expenditures in this area, he has decided to introduce a discount policy rewarding orders over $40 in the hope that this will cause customers to consolidate a number of small orders into large orders. The following data show the amounts per transaction for a sample of 28 customers:
10, 15, 20, 25, 15, 17, 41, 50, 5, 9, 12, 14, 35, 18, 19, 17, 28, 29, 11, 11, 43, 54, 7, 8, 16, 13, 37, 18
a. Compute the sample mean.
b. Compute the sample standard deviation.
c. Compute the sample variance.
d. If the policy is successful, will the mean of the distribution increase, decrease, or remain unaffected?
e. If the policy is successful, will the standard deviation of the distribution increase, decrease, or remain unaffected?
f. Given the data above, forecast the amount of the next customer order.