Running Head: ASSIGNMENT

Hypothesis Testing Assignment

[Writer Name]

[Institute Name]
 Hypothesis Testing Assignment
Background
According to a fast food setup, a drive-thru order typically requires three minutes of waiting. The
management of the restaurant want to test this assertion on a subset of clients.

Introduction
The purpose of this paper is to exhibit an in-depth examination of the ongoing situation of the
fast food sector, with an emphasis on the typical wait times for orders placed through drive-thrus.
I have tested hypotheses and created confidence intervals in cooperation with a well-known fast-
food restaurant to assess the restaurant's 3-minute average wait time claim. The study's findings
will make it clear whether the assertion is true and help the restaurant manager make decisions
that will enhance customers' dining experiences. Additionally, this study highlights the
increasing application of testing for hypotheses and confidence intervals in numerous industries,
underscoring their significance in quality control and decision-making processes.

Hypothesis Formulation
In testing for hypotheses, two frequent hypotheses are employed: the alternative hypothesis
which is denoted by H1 and null hypothesis which is denoted by H0. In this instance, the null
and alternative hypotheses are as follows:

Null Hypothesis (H0):

The mean time spent waiting for a drive-thru order is three minutes on average.

H0: μ = 3

Alternative Hypothesis (H1):

The mean time spent waiting for a drive-thru order is not three minutes on average.

H1: μ ≠ 3

In the present scenario, the null hypothesis assumes that the restaurant's claim is correct, and the
average wait time is indeed 3 minutes. The alternative hypothesis suggests that the average wait
time is different from 3 minutes, which means it could be either longer or shorter. The choice of
"not equal to" in the alternative hypothesis makes this a two-tailed test, which means you will be
testing whether the average wait time is significantly different from 3 minutes in either direction.

Test Statistic
To calculate the test statistic (z-value) for hypothesis testing, you can use the following formula:

Z = (x̅ – μ) / (σ /√n)

Where:

Test statistic is denoted by Z

Sample mean is represented by x̅

Population means acquired from the null hypothesis is represented by μ

Standard deviation of population is denoted by σ

Sample size is represented by n

In this case:

x̅ (sample mean) = 2.8 minutes

μ (mean of population from the null hypothesis) = 3 minutes

σ (standard deviation of population) = 0.4 minutes

n (sample size) = 50

Now, plug these values into the formula:

Z = 2.8 – 3 / (0.4 / √50)

Calculating the values inside the formula:

Z = - 0.2 / (0.4 / √50)

Now, calculating the square root of 50:

Z = - 0.2 / (0.4 / √50)

Now, divide -0.2 by (0.4 / 7.07107):

Z = - 0.2 / 0.0561777

Finally, calculating the value of Z:

Z ≈ −3.56

So, the test statistic (z-value) is approximately -3.56.

P-value and interpretation of results

The p-value for Z = -3.56 obtained using a regular normal distribution table or calculator is
incredibly small. It is quite close to zero.

Interpretation at a significance level of 0.05:

For the testing of hypotheses, the significance level (α) is usually set at 0.05, meaning that a 5%
probability of triggering a Type I error by rejecting the null hypothesis when it is correct) is
voluntarily accepted. The null hypothesis is ruled out because the p-value, which is practically
zero, is significantly less than the 0.05 level of significance. This designates that there is
substantial data to support the conclusion that the stated 3-minute wait time is not the typical
wait time for a drive-thru order. Practically speaking, it appears from the sample data that the
wait time on average is substantially less than three minutes. This can lead to the restaurant
taking steps to resolve the problem, such accelerating service or revising their wait time
guarantees.

Determine the 0.05 level of significance for the one-tailed test critical value by comparing it to
the computed z-value
For a one-tailed test with a 0.05 level of significance, it is needed to find the critical value
corresponding to the lower tail of the distribution. Since this is a left-tailed test (as in this task
testing whether the sample mean is less than the population mean), I want to find the critical
value that corresponds to the lower 5% of the distribution.

A z-table or a typical normal distribution chart can be used to determine the critical value.
Reduced to three decimal places, the critical value at a 0.05 level of significance is roughly -
1.645.

Now, let's compare this critical value with the calculated z-value, which was approximately -
3.56.

Comparison:

Calculated z-value = -3.56

Critical value for a one-tailed test at a 0.05 level of significance = -1.645

The calculated z-value (-3.56) is more extreme (further in the left tail) than the critical value (-
1.645). In hypothesis testing, if the test statistic (z-value) is more extreme than the critical value,
the null hypothesis would be rejected.

So, in current scenario, the null hypothesis would still reject. The conclusion remains the same:
There is strong evidence to suggest that the average wait time for a drive-thru order is
significantly less than the claimed 3 minutes. The sample data supports this conclusion.

Conclusions are affected when the sample size is reduced from 50 to 25.
Reducing the size of sample from 50 to 25 can have an impact on the conclusion of the
hypothesis test. When the sample size is reduced, it affects the precision and sensitivity of the
test. Here's how the change in sample size could affect the conclusion:

Impact on Test Statistic (Z-value):

With a smaller sample size (25), the standard error of the sample mean (σ / /√n) would be larger
compared to the larger sample size (50). This means that the test statistic (Z-value) would have a
smaller absolute value because you're dividing by a larger standard error.

Impact on P-value:
With a smaller sample size, the distribution of the sample mean turns out to be wider, leading to
a larger standard error. As a result, the calculated Z-value would need to be even more extreme
to reach statistical significance. This implies that the p-value would be larger, indicating less
evidence against the null hypothesis.

Impact on Conclusion:

If I decrease the sample size to 25 and the new calculated Z-value is less extreme (closer to zero)
but still in the left tail of the distribution, it is possible that the p-value is greater than 0.05 (the
chosen level of significance). In this case, I might not have enough evidence to not to accept the
null hypothesis.

To sum up, if the sample size is reduced to 25, the test would be less sensitive to variations
between the sample mean and the stated population mean, which could make it harder to reject
the null hypothesis. When creating hypothesis tests, the trade-off between test power and sample
size must be taken into account. Lower sample numbers could produce less trustworthy results
and provide insufficient data to draw a conclusion that contradicts the null hypothesis.

Illustrations of contexts or sectors in which confidence intervals and testing for hypotheses
might prove helpful
Pharmaceutical Drug Testing:

The confidence intervals and testing for hypotheses are essential tools used by pharmaceutical
companies to assess the efficacy and safety of novel medications. A pharmaceutical business
might, for instance, carry out clinical studies to evaluate the effectiveness of a novel drug in
treating a particular ailment. Based on the results of clinical trials, hypothesis testing can assist in
determining whether the new medication is more effective than an existing treatment (null
hypothesis). Confidence intervals are useful for estimating possible adverse effects and the range
of effectiveness. Obtaining regulatory approval and making well-informed judgments about
whether to introduce a medicine onto the market depend on this information.

Manufacturing Quality Control:

The intervals of confidence and testing for hypotheses are also utilised in manufacturing to
preserve and enhance product quality. For example, a car manufacturer could wish to make sure
that the tires on its cars have an average lifespan that fits a particular requirement. To find out if
the average tire lifespan matches the company's claims, testing for hypothesis might be used. For
this longevity, confidence intervals can offer a range. Manufacturers can improve customer
satisfaction and brand reputation by promptly identifying and correcting any deviations from
quality standards through the use of such testing.

These illustrations show how confidence intervals and testing for hypotheses are flexible
instruments that are utilized across a range of sectors to support informed decision-making,
verify assertions, and uphold standards of quality.