Hypothesis Testing

Hypothesis Testing

Step 1 : Formulate Hypothesis

Hypothesis Testing

Step 1 : Formulate Hypothesis

Step 2 : Calculate the t-statistic

Hypothesis Testing

Step 1 : Formulate Hypothesis

Step 2 : Calculate the t-statistic

Step 3 : Cutoff values for the t-statistic

Hypothesis Testing

Step 1 : Formulate Hypothesis

Step 2 : Calculate the t-statistic

Step 3 : Cutoff values for the t-statistic

Step 4 : Check whether t-statistic falls in the rejection region

Hypothesis Testing

Step 1 : Formulate Hypothesis

Step 2 : Calculate the t-statistic

Step 3 : Cutoff values for the t-statistic

Step 4 : Check whether t-statistic falls in the rejection region

Interpret results of hypothesis test as

applied to the particular business application
Hypothesis Testing from a previous lesson…

checking the claim that bottling unit puts in 200 ml of beverage in bottles
Hypothesis Testing from a previous lesson…

checking the claim that bottling unit puts in 200 ml of beverage in bottles

Null Hypothesis H0: µ = 200 Two tailed test

Alternate Hypothesis HA: µ ≠ 200
Hypothesis Testing from a previous lesson…

checking the claim that bottling unit puts in 200 ml of beverage in bottles

Null Hypothesis H0: µ = 200 Two tailed test

Alternate Hypothesis HA: µ ≠ 200

tn-1 distribution

α/2 probability α/2 probability

Hypothesis Testing from a previous lesson…

checking the claim that bottling unit puts in 200 ml of beverage in bottles

Null Hypothesis H0: µ = 200 Two tailed test

Alternate Hypothesis HA: µ ≠ 200

tn-1 distribution

α/2 probability α/2 probability

Hypothesis Testing from a previous lesson…

checking the claim that bottling unit puts in 200 ml of beverage in bottles

Null Hypothesis H0: µ = 200 Two tailed test

Alternate Hypothesis HA: µ ≠ 200

tn-1 distribution

α/2 probability α/2 probability

Hypothesis Testing
Single tail hypothesis test

tn-1 distribution
Hypothesis Testing
Single tail hypothesis test

tn-1 distribution

α probability
Hypothesis Testing
Single tail hypothesis test

tn-1 distribution

α probability
Hypothesis Testing
Example
A fuel additive manufacturer claims that through the use of its’ fuel
additive, automobiles in the small car category should achieve on
average an increase of 3 miles or more per gallon of fuel.
Hypothesis Testing
Example
A fuel additive manufacturer claims that through the use of its’ fuel
additive, automobiles in the small car category should achieve on
average an increase of 3 miles or more per gallon of fuel.

Claim made: increase in fuel efficiency is 3 miles per gallon or more

Hypothesis Testing
Example
A fuel additive manufacturer claims that through the use of its’ fuel
additive, automobiles in the small car category should achieve on
average an increase of 3 miles or more per gallon of fuel.

Claim made: increase in fuel efficiency is 3 miles per gallon or more

To test the claim…

1) Random selection of 150 small cars

Hypothesis Testing
Example
A fuel additive manufacturer claims that through the use of its’ fuel
additive, automobiles in the small car category should achieve on
average an increase of 3 miles or more per gallon of fuel.

Claim made: increase in fuel efficiency is 3 miles per gallon or more

To test the claim…

1) Random selection of 150 small cars.

2) Their fuel efficiency measured before and after the use of fuel additive.
Hypothesis Testing
Example
A fuel additive manufacturer claims that through the use of its’ fuel
additive, automobiles in the small car category should achieve on
average an increase of 3 miles or more per gallon of fuel.

Claim made: increase in fuel efficiency is 3 miles per gallon or more

To test the claim…

1) Random selection of 150 small cars.

2) Their fuel efficiency measured before and after the use of fuel additive.

3) 150 measurements obtained for the increase in miles per gallon achieved.
Hypothesis Testing
Example
A fuel additive manufacturer claims that through the use of its’ fuel
additive, automobiles in the small car category should achieve on
average an increase of 3 miles or more per gallon of fuel.

Claim made: increase in fuel efficiency is 3 miles per gallon or more

To test the claim…

1) Random selection of 150 small cars.

2) Their fuel efficiency measured before and after the use of fuel additive.

3) 150 measurements obtained for the increase in miles per gallon achieved.
Hypothesis Testing
Hypothesis Testing
Hypothesis Testing
Hypothesis Testing

Step 1 : Formulate Hypothesis

Null Hypothesis H0: µ ≥ 3.0

Alternate Hypothesis HA: µ < 3.0
Hypothesis Testing

Step 1 : Formulate Hypothesis

Null Hypothesis H0: µ ≥ 3.0

Alternate Hypothesis HA: µ < 3.0
Hypothesis Testing

Step 1 : Formulate Hypothesis

Null Hypothesis H0: µ ≥ 3.0

Alternate Hypothesis HA: µ < 3.0
Hypothesis Testing

Step 1 : Formulate Hypothesis

Null Hypothesis H0: µ ≥ 3.0 One tailed

Alternate Hypothesis HA: µ < 3.0 test
Hypothesis Testing

Step 1 : Formulate Hypothesis

Null Hypothesis H0: µ ≥ 3.0 One tailed

Alternate Hypothesis HA: µ < 3.0 test
Hypothesis Testing

Step 1 : Formulate Hypothesis

Null Hypothesis H0: µ ≥ 3.0 One tailed

Alternate Hypothesis HA: µ < 3.0 test
Hypothesis Testing

Step 1 : Formulate Hypothesis

Null Hypothesis H0: µ ≥ 3.0 One tailed

Alternate Hypothesis HA: µ < 3.0 test

Reject Null hypothesis if t-statistic is way below 0

Hypothesis Testing

Step 1 : Formulate Hypothesis

Null Hypothesis H0: µ ≥ 3.0 One tailed

Alternate Hypothesis HA: µ < 3.0 test

Reject Null hypothesis if t-statistic is way below 0

Only one rejection region on the Left-Hand-Side

Hypothesis Testing

Single tail hypothesis test with rejection region on the L.H.S.

H0: µ ≥ …
HA: µ < …
Hypothesis Testing

Single tail hypothesis test with rejection region on the L.H.S.

H0: µ ≥ …
HA: µ < …

Single tail hypothesis test with rejection region on the R.H.S.

H0: µ ≤ …
HA: µ > …
Hypothesis Testing

Single tail hypothesis test with rejection region on the L.H.S.

H0: µ ≥ …
HA: µ < …

Single tail hypothesis test with rejection region on the R.H.S.

H0: µ ≤ …
HA: µ > …
Hypothesis Testing

Single tail hypothesis test with rejection region on the L.H.S.

H0: µ ≥ …
HA: µ < …

Single tail hypothesis test with rejection region on the R.H.S.

H0: µ ≤ …
HA: µ > …
Hypothesis Testing

Single tail hypothesis test with rejection region on the L.H.S.

H0: µ ≥ …
HA: µ < …

Single tail hypothesis test with rejection region on the R.H.S.

H0: µ ≤ …
HA: µ > …
Hypothesis Testing

Single tail hypothesis test with rejection region on the L.H.S.

H0: µ ≥ …
HA: µ < …

Single tail hypothesis test with rejection region on the R.H.S.

H0: µ ≤ …
HA: µ > …

Two tail hypothesis test with rejection regions on both sides

H0: µ = …
HA: µ ≠ …
Hypothesis Testing

Step 1 : Formulate Hypothesis

Null Hypothesis H0: µ ≥ 3.0

Alternate Hypothesis HA: µ < 3.0

Step 2 : Calculate the t-statistic

Hypothesis Testing

Step 1 : Formulate Hypothesis

Null Hypothesis H0: µ ≥ 3.0

Alternate Hypothesis HA: µ < 3.0

Step 2 : Calculate the t-statistic

= -0.9072
Hypothesis Testing

H0: µ ≥ 3.0
Step 1 : Formulate Hypothesis
HA: µ < 3.0
Step 2 : Calculate the t-statistic = -0.9072

Step 3 : Cutoff values for the t-statistic

Hypothesis Testing

H0: µ ≥ 3.0
Step 1 : Formulate Hypothesis
HA: µ < 3.0
Step 2 : Calculate the t-statistic = -0.9072

Step 3 : Cutoff values for the t-statistic α = 0.05

 Hypothesis Testing

H0: µ ≥ 3.0
Step 1 : Formulate Hypothesis
HA: µ < 3.0
Step 2 : Calculate the t-statistic = -0.9072

Step 3 : Cutoff values for the t-statistic α = 0.05

α probability
 Hypothesis Testing

H0: µ ≥ 3.0
Step 1 : Formulate Hypothesis
HA: µ < 3.0
Step 2 : Calculate the t-statistic = -0.9072

Step 3 : Cutoff values for the t-statistic α = 0.05

α probability t-cutoff = -|T.INV(α, n-1)|

 Hypothesis Testing

H0: µ ≥ 3.0
Step 1 : Formulate Hypothesis
HA: µ < 3.0
Step 2 : Calculate the t-statistic = -0.9072

Step 3 : Cutoff values for the t-statistic α = 0.05

α probability t-cutoff = -|T.INV(α, n-1)|

 Hypothesis Testing

H0: µ ≥ 3.0
Step 1 : Formulate Hypothesis
HA: µ < 3.0
Step 2 : Calculate the t-statistic = -0.9072

Step 3 : Cutoff values for the t-statistic α = 0.05

α probability t-cutoff = -|T.INV(α, n-1)|

= -|T.INV(0.05, 150-1)|
 Hypothesis Testing

H0: µ ≥ 3.0
Step 1 : Formulate Hypothesis
HA: µ < 3.0
Step 2 : Calculate the t-statistic = -0.9072

Step 3 : Cutoff values for the t-statistic α = 0.05

α probability t-cutoff = -|T.INV(α, n-1)|

= -|T.INV(0.05, 150-1)| = -1.6551

-1.6551
Hypothesis Testing

H0: µ ≥ 3.0
Step 1 : Formulate Hypothesis
HA: µ < 3.0
Step 2 : Calculate the t-statistic = -0.9072

Step 3 : Cutoff values for the t-statistic α = 0.05

Step 4 : Check whether t-statistic falls in

the rejection region

-1.6551
Hypothesis Testing

H0: µ ≥ 3.0
Step 1 : Formulate Hypothesis
HA: µ < 3.0
Step 2 : Calculate the t-statistic = -0.9072

Step 3 : Cutoff values for the t-statistic α = 0.05

Step 4 : Check whether t-statistic falls in

the rejection region

-0.9072

-1.6551
Hypothesis Testing

H0: µ ≥ 3.0
Step 1 : Formulate Hypothesis
HA: µ < 3.0
Step 2 : Calculate the t-statistic = -0.9072

Step 3 : Cutoff values for the t-statistic α = 0.05

Step 4 : Check whether t-statistic falls in

the rejection region
Conclusion:
-0.9072  Do not reject Null hypothesis
 Our evidence is consistent with
the claim made

-1.6551