A food distribution company has employees that order food supplies for local restaurants by predicting sales.

Question

A food distribution company has employees that order food supplies for local restaurants by predicting sales. The company pulls an SRS of 500 orders and finds that 408 orders were correct. Calculate and interpret a 95% confidence interval for the proportion of all orders that were correct.

Answer 1

The Confidence Interval of a binomial proportion is obtained using:

(p - z*sqrt(p*q/n) , p + z*sqrt(p*q/n) ),

where p = 408/500 = 0.816, q=1-p=0.184, and z= 1.96 (z-score for 95% confidence level).

Therefore:

CI = ( 0.782, 0.85)