HYPOTHESIS TESTING FO

Problem
Kiran steel company manufactures computer Desk and weekly production follows norm
and standard deviation of 16 desks. Company introduecs new process for improving pr
A sample of 50 weeks production taken and mean desks production found to be 203.5
Marketing Head wants to establish whether there has been any change in the weekly p

Step 1 - state Null and Alternate Hypothesis

Ho: = 200
μ
H1 : μ ≠ 200
Two Tailed Test
Step 2 - select level of significance
α = .01
Step3 - select Test statistic
Normal Distribution with Population deviation σ known
Hence Z statistic
z =( x̄ - μ) /( σ/ √ n) x̄ sample Mean
μ Population Mean
σ Population standard deviation
n sample size

Step 4 - Formulate Decision Rule

Find critical value of Z
 Z critical

Z critical From Table z = 2.58 ( area = 0.5 - .005 = 0.495

z for 0.495 = 2.58)

Decision Rule
Compute Z value from sample
If z computed > 2.58 Reject H0
If z < -2.58 Reject H0

Step 5 - Make decision and interpret the result

z computed =( x̄ - μ) /( σ/ √ n)

z
computed 1.55
Decision and Inference

As Z calculated falls within Z critical value - Do not Reject H0

This means that there has been no significant improvement in production
due to process change.
 HESIS TESTING FOR ONE POPULATION MEAN

uction follows normal distribution with a mean of 200 desks

s for improving production.
found to be 203.5 desks.
nge in the weekly production or not at .01 significance level.

Two Tailed Test

deviation
 0.01 0.005 0.4950
0.4949
0.4951
Ztable 2.58

z critical
n production
 Hynes kitchen uses a machine to dispense 16 ounces into
containers. Haynes knows the amount of product in each
container follows a normal distribution with a mean of 16 ounces
and SD .15 ounces
A sample of 50 containers filled in the last 1 hour reveal the mean
per container was 16.017 ounce
Does the evidence suggest that the mean amount dispensed is
different from 16 ounces
use 0.05 significance

Step 1 - state Null and Alternate Hypothesis

H0 : Mue = 16
H1 : Mue not equal 16
It’s a two tailed test

Step 2 - select level of significance

Alpha = 0.05 0.025

Step3 - select Test statistic

Sample Mean 16.017
Population Mean 16
Population SD 0.15
Sample Size 50

Step 4 - Formulate Decision Rule

Z Crit 1.96

Step 5 - Make decision and interpret the result

z computed =( x̄ - μ) /( σ/ √ n) 0.801388

z computed =( x̄ - μ) /( σ/ √ n)
X Bar 16.017
Mean 16
Standard Deivation 0.15
N 50
0.017
7.071068
0.021213
0.801388
0.4750
 A recent insurance company report indicated
that 40% of those involved in minor traffic
accidents this year have been involved in at
least 1 other traffic accident.
A group believes this to be too large &
wanted to investigate?

A sample of 200 traffic accidents this year

shows that 74 were involved in another
accident within last 5 years
Use 0.01 as a significance level and infer

Step 1 - state Null and Alternate Hypothesis

H0: P > equal to 0.4
H1: P < 0.4

Step 2 - select level of significance

0.01 0.4900

Step3 - select Test statistic

np>10 n=200*p=0.4 80
n(1-p)>10 120

Step 4 - Formulate Decision Rule

Z crticial 2.33

Step 5 - Make decision and interpret the result

First step
to find P Standard deviation P hat = Square root of P(1-
hat P)/N 0.0012 0.034641

SD 0.0012 -0.03
SD 0.034641016151378 -0.866025
Z= (P hat- P)/SD*Phat

Phat 0.37

Z -0.866025403784439
MRF claims that mean mileage of their truck tire MX that can be driven before tread wears out
is 60,000 Km. The population standard deviation of the mileage is 5000 Km. Agarwal truck
company bought 48 tires and found that mean mileage for its trucks is 59,500 Km. Is the
Agarwal’s experience different from that claimed by the manufacturer at .05 significance
level?

SD 5000
N 48
Mean 59,500
Alpha 0.05

Step 1 - state Null and Alternate Hypothesis

Ho: μ = 60000
H1 : μ ≠ 60000

Step 2 - select level of significance

α = .05

Step3 - select Test statistic x̄

Normal Distribution with Population deviation σ known μ
Hence Z statistic σ
z =( x̄ - μ) /( σ/ √ n) n

Step 4 - Formulate Decision Rule

Find critical value of Z

0.025 0.4750
Z 1.96

Step 5 - Make decision and interpret the result

z computed =( x̄ - μ) /( σ/ √ n)
-0.69282

X Bar 59500
Mean 60000
Standard Deivation 5000
N 48
 sample Me 59500
Population 60000
Population 5000
sample size 48

z computed =( x̄ - μ) /( σ/ √ n)

-500
6.9282032
721.68784
-0.69282
Past experience of a Bob Travel agency indicated that 44% of those persons who wanted the agency to plan a vacation for the
to go to New Zealand. During the most recent busy season, a sample of 1000 plans selected at random from the files. It was
found that 480 persons wanted to go to New Zealand on vacation. Has there been a significant shift upward in the percentage
persons who want to go to New Zealand? Test at the .05 significance level.

Step 1 - state Null and Alternate Hypothesis

H0: P > equal to 0.44
H1: P < 0.44

Step 2 - select level of significance

α = .05

Step3 - select Test statistic

np>10
n(1-p)>10

Step 4 - Formulate Decision Rule

Step 5 - Make decision and interpret the result

Standard Deivation

Find P hat

Z Calculated
 n 1000

0.450 0.450

440
560

1.64 1.64

0.0156971

0.48

2.55