The purpose of the simulation is to demonstrate the concepts of the Central Limit Theorem, interval

estimation, and hypothesis testing in one simple business example.

You are a cereal plant manager and you are responsible for setting the cereal filling speed for this plant.
The speed of the filling process is a key factor that causes the variation in the process. From your experience,
the faster the speed, the larger the variation. If the process is not working properly, the weight in the boxes
could deviate too far from the label weight of 368 grams to be acceptable. As a manager, you want to set a
maximum filling speed to fully utilize the plant capacity, but at the same time you don't want a defective filling
process. Because it is too time-consuming and costly to weigh every single box, you must weigh only a sample
of boxes and judge whether the cereal-filling process is working properly. Here are the steps that you may take
to find out the maximum speed of your stable cereal filling process:
1. In the PopulationData worksheet, click the "(Step 1) Fill Cereal Boxes" button to start the filling
process and to generate population cereal weight data.
2. In the CLT worksheet, click the "(Step 2) Weigh Cereal Boxes" button to sample cereal box weights
and to visualize CLT in action.
3. (Optional) In the CLT worksheet, click the "(Step 3) Reveal Population Weights" button to see the
detail population data and statistics for verification purpose.
4. In the CI worksheet, click the "(Step 4) Calculate 95% C.I." button to calculate a 95% confidence
interval or
5. In the HT worksheet, click the "(Step 5) Test Your Claim" button to test your hypothesis.
From steps 4 and/or 5, you shall be able to find out if the current filling speed is either (1) too fast and causes an
unstable filling process or (2) too slow and leads to an under-utilized filling process.

You can then reset the filling speed accordingly in step 1 and go through steps 2, 4, and/or 5 to find the
maximum stable filling speed.
 # Cereal Boxes Filled

Population Mean Weight (m)

To be revealed in Step 3
Population Std. Dev. (s)
To be revealed in Step 3

Cereal Box # Weights (grams)

To be revealed in Step 3
Central Limit Theorem Explained σ
Χ̄ ~ N ( μ , )
√n
# Cereal Boxes in Each Test
Sampling Distribution
# Tests Average of Sample Average

# Tests Completed Std. Dev. of Sample Average (Std. Error)

Sample Average Sample Std. Dev.

Cereal Box # Weights (g)
(x-bar) (s)

Population Mean
P opula tion D is tr ibution

To be revealed in Step 3
S a m pling D is tr ibution

Population Std. Dev.

To be revealed in Step 3
10
9
vs.

8
7
6
5
4
3
2
1
0

Weight (g)
95% Confidence Interval (CI) Explained
σ s
C . I .= Χ̄ ±z× C . I .= Χ̄ ±t×
√n √n
when s is known when s is unknown
Test # L U L U

Population Mean
To be revealed in Step 4
Population Std. Dev.
To be revealed in Step 4
Theformula sedinTst¿1 Χ̄:CLT!$E10¿z:NORMSIV(97.5%)¿t:TINV(5%,CLT!$B3−1)¿σ:$A8¿s:CLT!$F10¿n:CLT!$B3¿
Hypothesis Testing Explained
X̄−μ 0 X̄−μ 0
z value= t value=
σ /√n s/√n

when s is known when s is unknown

Reject Reject
Test # z-value p-value t-value p-value
Null? Null?

The Claimed Weight (m0)

An input in Step 5
Test #1 Sample Average (x-bar)
To be calculated in Step 5
Population Std. Dev.
To be revealed in Step 5
The chance of making
type I error
 Whenthe
When thesample
sampleaverage
average(x-bar)
(x-bar)isislarger thanmm
less than m0000(368):
(368):
The null hypothesis ( your claim)
H 0 : μ=368 x x00x x
The alternative hypothesis
H a : μ≠368

Standardization

x  0 x  z 0 x   0
z x  0 z 
/ n  z 0 / n
 / n z z  / n

z z

p-value
= 2×[1-normsdist(abs(z))]
 Fill Rate Sample Size Sample Average Sample Std. Dev. L U
Distribution
(# boxes per shift) of the first test of the first test of the first test (95% CI) (95% CI)
 Your
p-value
Decision?