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Hypothesis Testing Additional Slides

1. The document discusses hypothesis testing and provides examples of forming hypotheses to test claims about population means. This includes hypotheses about rainfall, battery life, burger weight, tomato bruising, and other topics. 2. Examples are given of hypothesis tests conducted using sample data, including tests of claims about weekly earnings, frozen broccoli sales, accounts payable, insurance policy reading, business travel costs, attitudes toward minorities, student voting, employee cholesterol levels, mutual fund returns, and airfare prices. The appropriate test statistic and significance level are given for each example. 3. The document provides guidance on identifying the null and alternative hypotheses, identifying the appropriate test statistic (e.g. z-test, t-

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Ganesh Prasad
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123 views

Hypothesis Testing Additional Slides

1. The document discusses hypothesis testing and provides examples of forming hypotheses to test claims about population means. This includes hypotheses about rainfall, battery life, burger weight, tomato bruising, and other topics. 2. Examples are given of hypothesis tests conducted using sample data, including tests of claims about weekly earnings, frozen broccoli sales, accounts payable, insurance policy reading, business travel costs, attitudes toward minorities, student voting, employee cholesterol levels, mutual fund returns, and airfare prices. The appropriate test statistic and significance level are given for each example. 3. The document provides guidance on identifying the null and alternative hypotheses, identifying the appropriate test statistic (e.g. z-test, t-

Uploaded by

Ganesh Prasad
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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HYPOTHESIS TESTING

ADDITIONAL SLIDES
• Formulate the null and alternative hypotheses to test whether the mean annual
rainfall in Udupi exceeds 400 cm.
• In a trial, the null hypothesis is that an individual is innocent of a certain crime.
Which one is better: committing Type I or Type II error?
• As a quality control engineer for the battery manufacturer, you are testing the
claim that the battery life is more at least 300 days. Formulate the hypotheses.
Would you rather make a Type I or Type II error?
• A fast-food company advertises that the pre-cooked weight for its burgers is, on
average, 0.2 kg. The company runs a regular quality control test that involves
weighing a sample of burgers to see if the burgers are too light or too heavy. If the
sample mean weight is significantly different than 0.2 kg, then they recycle the
entire batch.
• A ketchup company receives shipments of tomatoes. For each shipment that is
received, a supervisor takes a random sample of 500 tomatoes to see what percent
of the sample is bruised. If the sample shows evidence that more than 10%,
percent of the entire shipment of tomatoes is bruised, then they will request a new
shipment of tomatoes.
1. Use the data given to test the following hypotheses.
H0: µ = 1200 Ha: µ > 1200
X̅ = 1215, n = 113, σ = 100, α = 0.10
• Use the p-value to obtain the results.
• Solve for the critical value required to reject the mean

2. According to statistics, the average weekly earnings of a production worker in


1997 were $424.20. Suppose a labor researcher wants to test to determine
whether this figure is still accurate today. The researcher randomly selects 54
production workers and obtains a representative earnings statement for one week
from each. The resulting sample average is $432.69.
Assuming a population standard deviation of $33.90, and a 5% level of
significance, determine whether the mean weekly earnings of a production
worker have changed.
Grand Junction Vegetables is a producer of a wide variety of frozen
vegetables. The company president has asked you to determine if the
weekly sales of 16-ounce packages of frozen broccoli has increased. The
mean weekly number of sales per store has been 2,400 packages over
the past 6 months. You have obtained a random sample of sales data
from 134 stores for your study. The sample mean is 3593 and the
sample standard deviation is 4919.
Carryout the test at 0.05 significance level.
The accounts of a corporation show that, on average, accounts payable
are $125.32. An auditor checked a random sample of 16 of these
accounts. The sample mean was $131.78 and the sample standard
deviation was $25.41. Assume that the population distribution is
normal.
• Test at the 5% significance level the null hypothesis that the
population mean is $125.32.
An independent agency conducted a survey of insurance consumers
and discovered that 48% of them always reread their insurance policies,
29% sometimes do, 16% rarely do, and 7% never do. Suppose a large
insurance company invests considerable time and money in rewriting
policies so that they will be more attractive and easy to read and
understand. After using the new policies for a year, company managers
want to determine whether rewriting the policies significantly changed
the proportion of policyholders who always reread their insurance
policy. They contact 380 of the company’s insurance consumers who
purchased a policy in the past year and ask them whether they always
reread their insurance policies. One hundred and sixty-four respond
that they do.
Use a 1% level of significance to test the hypothesis.
A company’s auditor believes the per diem cost in Bangalore rose
significantly between 1999 and 2009. To test this belief, the auditor
samples 51 business trips from the company’s records for 1999; the
sample average was Rs.1900 per day, with a population standard
deviation of Rs.185. The auditor selects a second random sample of 47
business trips from the company’s records for 2009; the sample
average was Rs.1980 per day, with a population standard deviation of
Rs.156. If he uses a risk of committing a Type I error of .01, does the
auditor find that the per diem average expense in Bangalore has gone
up significantly?
A screening procedure was designed to measure attitudes toward
minorities as managers. High scores indicate negative attitudes and low
scores indicate positive attitudes. Independent random samples were
taken of 151 male financial analysts and 108 female financial analysts.
For the former group the sample mean and standard deviation scores
were 85.8 and 19.13, whereas the corresponding statistics for the latter
group were 71.5 and 12.2. Test if the true mean score is higher for male
than for female financial analysts.
A political science professor is interested in comparing the
characteristics of students who do and do not vote in national
elections. For a random sample of 114 students who claimed to have
voted in the last presidential election, she found a mean grade point
average of 2.71 and a standard deviation of 0.64. For an independent
random sample of 123 students who did not vote, the mean grade
point average was 2.79 and the standard deviation was 0.56. Test,
against a two-sided alternative, the null hypothesis that the population
means are equal.
Eleven employees were put under the care of the company nurse because of high cholesterol
readings. The nurse lectured them on the dangers of this condition and put them on a new diet.
Shown are the cholesterol readings of the 11 employees both before the new diet and one month
after use of the diet began. Construct a 98% confidence interval to estimate the population mean
difference of cholesterol readings for people who are involved in this program. Assume differences
in cholesterol readings are normally distributed in the population.
Employee Before After
1 255 197
2 230 225
3 290 215
4 242 215
5 300 240
6 250 235
7 215 190
8 230 240
9 225 200
10 219 203
11 236 223
Mutual funds are classified as load or no-load funds. Load funds require an
investor to pay an initial fee based on a percentage of the amount invested
in the fund. The no-load funds do not require this initial fee. Some
financial advisors argue that the load mutual funds may be worth the extra
fee because these funds provide a higher mean rate of return than the no-
load mutual funds. A sample of 30 load mutual funds and a sample of 30
no-load mutual funds were selected. Data were collected on the annual
return for the funds over a five-year period. The data are contained in the
data set Mutual.xlsx.
Formulate and test the hypothesis as argued by the financial advisors.
The dataset BusinessTravel.xlsx contains data for twelve flights with
their domestic airfares for the current and the previous years. Test the
hypothesis that there is a significant increase in the airfare in the one-
year period.

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