The Owner of a Small Convenience Store Is Trying to Decide

question 28

Essay

The owner of a small convenience store is trying to decide whether to discontinue selling magazines. He suspects that only 5% of the customers buy magazines and thinks that he might be able to sell something more profitable. Before making a final decision, he keeps track of the number of customers who buy magazines on a given day.
a. On one day, he had 280 customers. Assuming this day was typical, what would be the mean and standard deviation of the number of customers who buy magazines each day?
b. Surprised by the high number of customers who purchased magazines that day, the owner decided that his 5% estimate must have been too low. How many magazine sales would it have taken to convince you? Justify your answer.