The Owner of a Small Clothing Store Is Concerned That

question 102

Essay

The owner of a small clothing store is concerned that only 28% of people who enter her store actually buy something. A
marketing salesman suggests that she invest in a new line of celebrity mannequins (think Seth Rogan modeling the latest
jeans…). He loans her several different "people" to scatter around the store for a two-week trial period. The owner carefully
counts how many shoppers enter the store and how many buy something so that at the end of the trial she can decide if she'll
purchase the mannequins. She'll buy the mannequins if there is evidence that the percentage of people that buy something
increases.
-Over the trial month the rate of in-store sales rose to 30% of shoppers. The store's owner
decided this increase was statistically significant. Now that she's convinced the
mannequins work, why might she still choose not to purchase them?

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Definitions:

Normal Random Variable

This variable is described by a distribution that has a graph in the shape of a bell curve, indicating its probability density function is symmetrical around its mean.

Standard Deviation

The statistic that quantifies the dispersion of a set of data points around their mean; it measures how spread out the values in the dataset are.

Percentile

A measure used in statistics indicating the value below which a given percentage of observations in a group of observations fall.

Standard Normal Distribution

A special case of the normal distribution with a mean of zero and a standard deviation of one.