Question

In order to control costs, a company wishes to study the amount of money its sales force spends entertaining clients. Assuming that the distribution of entertainment expenses is approximately bell-shaped, with a mean of AED 250 and a standard deviation of AED 50,

1. Calculate estimates of tolerance intervals containing approximately 68 percent, 95 percent, and 99 percent of all entertainment expenses by the sales force.
2. If a member of the sales force submits an entertainment expense of AED 420, should this expense be considered unusually high (and possibly worthy of investigation by the company)? Explain your answer.

Answer 1