5. As an example of a situation in which several different statistics could reasonably be used to...
Question:
5. As an example of a situation in which several different statistics could reasonably be used to calculate a point estimate, consider a population of N invoices. Associated with each invoice is its “book value,” the recorded amount of that invoice. Let T denote the total book value, a known amount. Some of these book values are erroneous. An audit will be carried out by randomly selecting n invoices and determining the audited (correct) value for each one.
Suppose that the sample gives the following results (in dollars).
Let Y sample mean book value X sample mean audited value D sample mean error Propose three different statistics for estimating the total audited (i.e., correct) value—one involving just N and X, another involving T, N, and D, and the last involving T and X/Y . If N 5000 and T 1,761,300, calculate the three corresponding point estimates. (The article “Statistical Models and Analysis in Auditing,” Statistical Science, 1989:
2–33). discusses properties of these estimators.)
Step by Step Answer:
Probability And Statistics For Engineering And The Sciences
ISBN: 9781111802325
7th Edition
Authors: Dave Ellis, Jay L Devore