A large grocery store chain believes that 80% of its customers use the stores Savings Card when

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A large grocery store chain believes that 80% of its customers use the store’s “Savings Card” when they make purchases. The manager in charge of the “Savings Card” program has randomly sampled 20 customers and observed whether or not they used the card.

a. Assuming that the 80% use rate is correct, what is the probability that 17 or more people in the sample used the card?

b. Repeat the calculation in part a assuming that the use rate is 70%; that it is 90%.

c. Based on your calculations, if 17 people in the sample used the card, which of the three use rates do you think is most accurate? Explain.

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Business Statistics

ISBN: 9781292220383

10th Global Edition

Authors: David Groebner, Patrick Shannon, Phillip Fry

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