Confidence Interval

Use the Internet or Strayer Library to research articles on confidence interval and its application in business. Select one (1) company or organization which utilized confidence interval technique to measure its performance parameters (e.g., mean, variance, mean differences between two processes, etc.). Give your opinion as to whether or not the utilization of such a technique improves business process for the company or organization that you selected. 

Just like any other field, a business can benefit from the use of statistics in estimating or predicting future events. It’s fascinating to note that companies can apply confidence interval, intervals that quantify the degree of uncertainty in an estimate or prediction, to measure its performance parameters (Hoerl & Snee, 2012). Apple is a good example of a company that has once applied a confidence interval technique to predict the performance of the process of producing iPhones. The company reported that before releasing the first iPods, the process determining how reliable the units would be when they were released to the market was accomplished using confidence interval. For instance, the company let 200 employees use iPods internally, and about a month later only three were reported to have broken down.

The question of interest would be the proportion, p, of broken iPods if they were sold to the public as they were constructed by that time. For instance, the sample proportion, p = 2/200, is equivalent to a confidence interval for the unknown p, and was calculated using the proportion to break. The estimated proportion was established to be between 0 and 1% with 95% confidence. Therefore, the company proceeded to use the production process as the percentage of broken was relatively lower. Mostly, a 95% confidence interval helped quantify the true slope of the uncertainty around the actual relationship between the current production process and the rate of failure (Nolan, Mitchell & Doyle-Baker, 2014). Therefore, the utilization of such a technique helps improve the business process for the selected company as it expedites the process of determining an unknown parameter that describes a particular product or since the exact value cannot be determined.


Hoerl, R. & Snee, R. D. (2012). Statistical Thinking: Improving Business Performance, 2nd Edition. [Strayer University Bookshelf]. Retrieved from

Nolan, M., Mitchell, J. R., & Doyle-Baker, P. K. (2014). Validity of the Apple iPhone®/iPod Touch® as an accelerometer-based physical activity monitor: a proof-of-concept study. Journal of physical activity & health11(4).