Question

Three firms carry inventories that differ in size. Firm A's inventory contains items, firm B's inventory contains items, and firm C's inventory contains items. The population standard deviation for the cost of the items in each firm's inventory is . A statistical consultant recommends that each firm take a sample of items from its inventory to provide statistically valid estimates of the average cost per item. Employees of the small firm state that because it has the smallest population, it should be able to make the estimate from a much smaller sample than that required by the larger firms. However, the consultant states that to obtain the same standard error and thus the same precision in the sample results, all firms should use the same sample size regardless of population size.

What is the probability that for each firm the sample mean will be within of the population mean (to 4 decimals)?

Firm A

Firm B

Firm C

Answer 1

Here I wrote the answer as per my assumption as the values were not given by you in the problem. Thank you.

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