BUSINESS MODELING ASSIGNMENT

Business Modelling Assignment



Business Modelling Assignment

Question 1

The confidence interval (CI) 95% is a range of values around the normal curve ??that has a 95% chance of containing the true value of the estimated parameter. It is possible to say that the CI represents the range of values within which we are 95% certain to find the true value sought. The confidence interval is the set of values around the normal curve ??reasonably consistent with the observed results (point estimate). It gives a view of the uncertainty of the estimate. Confidence intervals at 99% or 90% are also sometimes used. The probability (confidence level) of these intervals contain the true value is respectively 99% and 90%. The confidence interval consists of values ??that are not statistically significantly different from the observed result. The upper and lower bounds are the values ??furthest from the result that it is not statistically different. By against the values ??located outside the interval are statistically different from the observed result. Thus, the upper bound is the largest value not significantly different from the observed value.

Here the confidence interval for salaries lies between 82636 and 87364 i.e. there exists a 95% certainty that all the values of the salary lies in this range.

Average salary = 85000

Ho: The mean salary of the management staff is not equal to the original mean.

H1: The mean salary of the management staff is equal to the original mean.

Now, using the two - tailed t - statistics

T = x - u/ SD

T = 87375 - 85000 / 2371.15

Tcal = 1.001

The calculated t - value result is less than the tabulated value. Therefore, we can accept the null hypothesis and can conclude that the mean salary of the management staff is not equal to the original mean.

After using the 90% ...