Variation exists naturally in the world around us so all processes and products can be
expected to vary.
A product that is produced at Ramsey Manufacturing goes through three steps to be
built. At step one, the components are assembled by technicians. At step two, the
product is sanded, and at step three the product is painted. The product can become
defective if any of these three steps is performed incorrectly. The three steps are done
by different people in different locations. We let D1 = defect introduced at step 1, D2 =
defect introduced at step 2, and D3 = defect introduced at step three. Based on this
situation these three events would be considered to be mutually exclusive.
The manager in charge of concessions at an NFL football stadium is interested in
estimating the mean dollars that are spent per person attending the games. A pilot
sample of n = 50 people has revealed a sample mean and standard deviation of $12.35
and $2.35 respectively. He wishes to estimate the population mean within $0.20 of the
true mean and wishes to have a confidence level of 95 percent. Given this, he needs to
sample an additional 481 people.