Question

An airline needs an estimate of the average number of passengers (the mean passenger load) on a newly scheduled flight. If the mean passenger load on this flight does not exceed 120 passengers in the first few months of operation, the airline plans to discontinue the flight. Its experience is that data for the first month of flights are unreliable, but thereafter the passenger load settles down. Therefore, the sample mean passenger load is calculated for the first 20 weekdays of the second month and is found out to be 128 passengers. The population standard deviation for the number of passengers on this flight is 10. Using the given information please calculate and interpret the 90% confidence interval for the mean passenger load on the new flight clearly showing the necessary steps. According to the confidence interval you have constructed, do you think the airline will discontinue this flight? Please justify your answer.          ​

Answer 1