To Determine the Effectiveness of a Diet to Reduce the Amount

question 36

Essay

To determine the effectiveness of a diet to reduce the amount of serum cholesterol, 20 people were randomly selected to try the diet. After they had been on the diet a sufficient amount of time, their blood was tested to determine the level of serum cholesterol. The clinic running the experiment will approve and endorse the diet only if at least 16 of the 20 people lower their cholesterol significantly.
a. What is the random variable of interest?
b. What is the probability the clinic will erroneously endorse the diet when, in fact, it is useless in treating high serum cholesterol? [Hint: If the diet is ineffective, a person's cholesterol level is equally likely to go up or down.]

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Definitions:

Retailer

A business or individual that sells goods to the public in relatively small quantities for use or consumption rather than for resale.

Manufacturer

A person or company that makes goods for sale, especially on a large scale, involving processes such as designing, testing, and mass-producing products.

Fixed Cost

Expenses that do not change with the level of goods or services produced over the short term, such as rent, salaries, and insurance.

Holding Cost

The expenses incurred for storing and maintaining inventory, including warehousing, insurance, and depreciation costs.