Question:

a. Suppose a fast-food restaurant wishes to estimate average sales volume for a new menu item. The restaurant has observed the sales of the item at a similar outlet and has determined the following results:

X= 500 (mean daily sales)

S = 100 (standard deviation of sample)

n = 25 (sample size)

The restaurant manager wants to know into what range the mean daily sales would fall 95 percent of the time. Perform this calculation.

b. An automobile dealership plans to conduct a survey to determine what proportion of new car buyers continue to have their cars serviced at the dealership after the warranty period ends. It estimates that 30 percent of customers do so. It wants the results of its survey to be accurate within 5 percent, and it wants to be 95 percent confident of the results. What sample size is necessary?