Enriquez, Hope Trinity B.

Bus statistic sec 47

CASE PROBLEM 1 QUALITY ASSOCIATES, INC.

1. Conduct a hypothesis test for each sample at the .01 level of significance and determine
what action, if any, should be taken. Provide the test statistic and p-value for each test

Answer:

Sample 1 Sample 2 Sample 3 Sample 4

Sample Size 30 30 30 30
Mean 11.959 12.029 11.889 12.081
Standard 0.220 0.220 0.207 0.206
Deviation
Level of
significance
0.010 0.010 0.010 0.010
(alpha)
Critical Value -2.576 -2.576 -2.576 -2.576
(lower tail)
Critical Value 2.576 2.576 2.576 2.576
(upper tail)
Hypothesized 12 12 12 12
Value
Standard Error 0.040 0.040 0.038 0.038
Test statistics -1.027 0.713 -2.935 2.161
p-Value 0.304 0.476 0.003 0.031

Among the three samples, Sample 3 is only one that leads rejection of the hypothesis H0:
µ = 12. Sample 1,2 and 4 indicates H0 cannot be rejected and from that we can tell, the process is
adequately operating. Sample 3 with the mean of 11.89 is shows the method is
working beneath the required mean, additionally sample 4 with mean 12.08 is on the high aspect,
however the p-value of sample 3 isn’t enough to reject H0.

2. Compute the standard deviation for each of the four samples. Does the assumption of .21
for the population standard deviation appear reasonable?

Answer:
 All of the four samples, their standard deviation is in the .20 to .22 range. It appears that
the assumption of .21 for the population standard deviation is reasonable.

3. Compute limits for the sample mean around such that, as long as a new sample mean is
within those limits, the process will be considered to be operating satisfactorily. If
exceeds the upper limit or if is below the lower limit, corrective action will be taken.
These limits are referred to as upper and lower control limits for quality control purposes.

Answer:

With α = .01, z.005 = 2.576. Using the standard error of the mean 0.0383, the upper and
lower control limits are computed as follows:

Upper Control Limit = 12 + 2.576 (0.0383) = 12.0987

Lower Control Limit = 12 - 2.576 (0.0383) = 11.9013

As long as a sample mean is between these two limits, the method is stable and no
corrective action is required. Sample 3 that has a mean of 11.89 is destitute of corrective
action because the sample mean is over the control limits.

4. Discuss the implications of changing the level of significance to a larger value. What
mistake or error could increase if the level of significance is increased?

Answer:

Increasing the extent of significance will cause the null hypothesis to be rejected more often.
While this could mean quicker corrective action when the method is out of control, it also implies that
there’ll be a next error probability of stopping the method and attempting corrective action when the
method is working satisfactorily. This is able to be a rise within the probability of making a Type I
error.