The preventable monthly loss at a company has a normal distribution with a mean of $5700 and a standard deviation of $30. A new policy was put into place, and the preventable loss the next
Month was $5520. What inference can you make about the new policy?
A)The new policy is probably less effective than the one it replaced.
B)Because the probability that the monthly loss would be as low as $5520 is not very small, the new policy is not working.
C)Because the probability that the monthly loss would be as low as $5520 is small, the new policy is working.
D)While the probability that the monthly loss would be as low as $5520 is small, it is not unexpected.

Question

Quizplus · Accepted Answer

The preventable monthly loss decreased significantly from the mean ($5700) to $5520, which is more than 6 standard deviations away ($30 each). This significant decrease suggests that the new policy is effective in reducing losses, making option C the correct inference.

The Preventable Monthly Loss at a Company Has a Normal