Managers of engineering firm


You have been asked to perform experiment by the managers of engineering firm. They tell you that they are capable to allocate more money to planned experiments than they previously thought. The money can either be allocated to using a new testing procedure which would reduce the standard deviation of measurements to one half of its value under the old procedure. Alternatively the money can be used to increase the sample size from 100 to 200. Explain to the managers which action they should prefer, if they want to have the smallest bound on error for a 95% confidence interval.

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Basic Statistics: Managers of engineering firm
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