A Local Menʹs Clothing Store Is Being Sold

question 13

Essay

A local menʹs clothing store is being sold. The buyers are trying to estimate the percentage
of items that are outdated. They will choose a random sample from the 100,000 items in
the storeʹs inventory in order to determine the proportion of merchandise that is outdated.
The current owners have never determined the percentage of outdated merchandise and
cannot help the buyers. How large a sample do the buyers need in order to be 90%
confident that the margin of error of their estimate is within 3%?

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Definitions:

Range

The difference between the highest and lowest values in a data set, used as a measure of statistical dispersion.

Natural Causes

Factors that affect events or conditions based on processes inherent to the natural world, as opposed to human-made influences.

Assignable Causes

Factors identified as reasons for variation in a process, which can be isolated and where corrective action can be applied.

Process Capability Ratio

A statistical measure that evaluates the ability of a production process to produce output within specified limits.