3Q.

A salesman paid 12 visits to his area sales manager and noted that he had to wait
for 10,15,20,17,11,25,30,27,36,40,5 and 26 minutes, respectively, before being called in
his office. The area sales manager claims that the salesmen wishing to meet him do not
have to wait for more than 20 minutes before being called in. Using the sign test, verify
at 0.05 level of significance the claim made by the area sales manager
Solution:
Step 1 and 2:defining Hypothesis
1. Null Hypothesis (H0): Md<20(Claim)
The waiting time for the salesman before being called in by the sales Manager is less than 20
mins

2. Alternative Hypothesis (Ha): Md>=20(counter claim)
The waiting time for salesman before being called in by the sales Manager is less than 20
mins
Step 3: Level of Significance (LOS)=0.05 (right tail)
Step4: Calculation of Test Statistic
Median M=20
Subtract each of the X values from 20
No of Visits
by Sales
man
Waiting time of
Salesman
X-20
1 10 -10
2 15 -5
3 20 0
4 17 -3
5 11 -9
6 25 +5
7 30 +10
(8 27 +7
9 36 +16
10 40 +20
11 5 -15
12 26 +6
No of + signs =6
No of signs = 5
No of 0s =1
n= no of + and - signs excluding 0
n=12-1=11
X= No of times a particular + or - sign has occurred less frequently
Calculated value min (+ signs, - signs) = (6, 5) = 5
Step 5:
Critical Value for X for n=11 at 0.05 level of significance for one sample test is 2 (from
tables).
X<=2
As the Test statistic lies outside the rejected region we accept null hypothesis and
conclude that the claim made by the sales manager is correct.