Tutorial : CI

1. Air traffic controllers have the crucial task of ensuring that aircraft don’t collide. To do this,
they must quickly discern when two planes are about to enter the same air space at the same
time. They are aided by video display panels that track the aircraft in their sector and alert the
controller when two flight paths are about to converge. The display panel currently in use has
a mean “alert time” of 15 seconds. (The alert time is the time elapsing between the instant when
two aircraft enter into a collision course and when a controller initiates a call to reroute the
planes.) According to Ralph Rudd, a supervisor of air traffic controllers at the Greater
Cincinnati International Airport, a new display panel has been developed that uses artificial
intelligence to project a plane’s current flight path into the future. This new panel provides air
traffic controllers with an earlier warning that a collision is likely. It is hoped that the mean
“alert time,” m, for the new panel is less than 8 seconds.In order to test the new panel, 15
randomly selected air traffic controllers are trained to use the panel and their alert times for a
simulated collision course are recorded. The sample alert times (in seconds) are: 7.2, 7.5, 8.0,
6.8, 7.2, 8.4, 5.3, 7.3, 7.6, 7.1, 9.4, 6.4, 7.9, 6.2, 8.7.
a Using the fact that mean= 7.4 and standard deviation= 1.026, find a 95 percent confidence
interval for the population mean alert time, m, for the new panel.
b Can we be 95 percent confident that m is less than 8 seconds?

2. Whole Foods is an all-natural grocery chain that has 50,000 square foot stores, up from the industry
average of 34,000 square feet. Sales per square foot of supermarkets average just under $400 per square
foot, as reported by USA Today in an article on “A whole new ballgame in grocery shopping.” Suppose
that sales per square foot in the most recent fiscal year are recorded for a random sample of 10 Whole
Foods supermarkets. The data (sales dollars per square foot) are as follows: 854, 858, 801, 892, 849,
807, 894, 863, 829, 815. Using the fact that mean= 846.2 and standard deviation= 32.866, find a 95
percent confidence interval for the population mean sales dollars per square foot for all Whole Foods
supermarkets during the most recent fiscal year. Are we 95 percent confident that this mean is greater
than $800, the historical average for Whole Foods?

3. In a news story distributed by the Washington Post, Lew Sichelman reports that a substantial fraction
of mortgage loans that go into default within the first year of the mortgage were approved on the basis
of falsified applications. For instance, loan applicants often exaggerate their income or fail to declare
debts. Suppose that a random sample of 1,000 mortgage loans that were defaulted within the first year
reveals that 410 of these loans were approved on the basis of falsified applications.
a Find a point estimate of and a 95 percent confidence interval for p, the proportion of all
first-year defaults that are approved on the basis of falsified applications.
b Based on your interval, what is a reasonable estimate of the minimum percentage of all first year
defaults that are approved on the basis of falsified applications?