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Rental car fleet evaluation. National Car Rental Systems, Inc., commissioned the U.S. Automobile Club (USAC) to conduct a survey of the general condition of the cars rented to the public by Hertz, Avis, National, and Budget Rent-a-Car.* USAC officials evaluate each company鈥檚 cars using a demerit point system. Each car starts with a perfect score of 0 points and incurs demerit points for each discrepancy noted by the inspectors. One measure of the overall condition of a company鈥檚 cars is the mean of all scores received by the company (i.e., the company鈥檚 fleet mean score). To estimate the fleet mean score of each rental car company, 10 major airports were randomly selected, and 10 cars from each company were randomly rented for inspection from each airport by USAC officials (i.e., a sample of size n = 100 cars from each company鈥檚 fleet was drawn and inspected).

a. Describe the sampling distribution of x, the mean score of a sample of n = 100 rental cars.

b. Interpret the mean of x in the context of this problem.

c. Assume=30 and =60for one rental car company. For this company, findPx45 .

d. Refer to part c. The company claims that their true fleet mean score 鈥渃ouldn鈥檛 possibly be as high as 30.鈥 The sample mean score tabulated by USAC for this company was 45. Does this result tend to support or refute the claim? Explain.

Short Answer

Expert verified

a. The mean of the sampling distribution of x is and standard deviation 100.

b. The sampling distribution is approximately normal having mean and standard deviation of100

c. The probability for the eventx45 for one rental cars of the company is 0.0062.

d. From the normal distribution properties, we can say that the probability is 0.5 for the average fleet is high.

Step by step solution

01

Given information 

10 major airports were randomly selected and 10 cars from each company were randomly rented for inspection from each airport by USAC officials.

02

Describing the sampling distribution of x

a.

Let the random variable x is defined as the scores of the company, and the sample mean is defined as the mean score of the company. The mean and standard deviation of the population are and respectively.

Then, the sampling distribution of the sample mean

As we know that the probability distribution of xis normal with meanx=

The size of the samplen=100

Since,

x=n=100

Hence, the mean of the sampling distribution of x is and standard deviation100 .

03

Interpreting the mean of x

b.

The sampling distribution of the sample mean is nothing but the company鈥檚 fleet mean score distribution of rented cars.If we consider the mean fleet time of all the 10 rented cars selected from the 10 airports is the sample mean.The mean of all the population is considered as for all the rental car company and standard deviation as . According to the central limit theorem as sample size is increased then the sampling distribution is approximated to be normal.Therefore, the sampling distribution is approximately normal having mean and standard deviation of100

04

Calculating the probability

c.

This sample is drawn from the population having mean and standard deviation as andrespectively, hence,

localid="1658241367107" =30, localid="1658241362349" =60and the size of the sample localid="1658241358142" n=100

As we know that the probability distribution of xis normal with mean


localid="1658241371916" x==30

localid="1658241376261" x=n=60100=6

Herer, the probability for the event that the company鈥檚 fleet mean score greater than or equal to 45, which is same as that of finding the probability for the event localid="1658241381184" x45for one rental cars of the company.

Now, the standard normal random variable z is defined as:

localid="1658241387915" z=x-xx

Therefore, for ,localid="1658241407753" x=19.6

localid="1658241400589" z=45-306=2.5

Now the probability for the eventlocalid="1658241395406" x>45is calculated as follows:

The normal curve associated with this event is shown below:

The areas A is obtained from the statistical tables,

Px45=Pz2.5=0.5-A=0.5-0.4938=0.0062

Hence, the probability for the event x45for one rental cars of the company is 0.0062.

05

Interpretation

d.

The probability that the mean fleet score takes greater than 45 is 0.0062. The probability is not negligible.The company鈥檚 claim is true when the probability is not negligible.From the normal distribution properties, we can say that the probability is 0.5 for the average fleet is high.

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