Business Statistics

Comparing Mean to a Value: t-distribution

 Exercise 3
The Management of White Industries is considering a new method of assembling its golf cart. The
present method requires 42.3 minutes, on the average, to assemble a cart. The mean assembly time for
a random sample of 24 carts, using the new method, was 40.6 minutes, and the standard deviation of
the sample was 2.7 minutes.
a. Using the 0.1 level of significance, can we conclude that the assembly time using the new
method is faster?

Step 1: State the null and alternate hypothesis:

Ho: µ ≥ 42.3
H1: µ < 42.3

m
Step 2: Select the level of significance:

er as
co
α = 0.1

eH w
Step 3: Select the appropriate test statistic:

o.
rs e
ou urc
Use t distribution.

t = [(x-bar - µ)]/[s/square root of n]

o

Step 4: Formulate decision rule:

aC s
vi y re

First, let’s find the critical value:

Since it’s one tailed test (H1 states a direction; “<”), go to Level of Significance for one-tailed test
(alpha = 0.1).
ed d

df = n – 1 = 24 – 1 = 23; we find t = 1.319

ar stu

Since H1: µ < 42.3, we’re dealing with left-tailed test. So, decision rule is as follows:
is

If t-computed is less than -1.319 then Reject Ho.

If t-computed is greater than -1.319, then Do Not Reject Ho.
Th

Step 5: Make a decision:

sh

t = [(x-bar - µ)]/[s/square root of n]

t = [(40.6 – 42.3)]/ [2.7/square root of 24] = -3.09

Since t-computed (-3.09) is less than t-critical (-1.319), then Reject Ho

Fail to Reject H1
µ < 42.3
Conclusion: At 0.1 level of significance, we can conclude that the assembly time using the new
method is faster.
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  Exercise 6

The Myers Summer Casual Furniture Store tells customers that a special order will take six weeks (42
days). During recent months the owner has received several complaints that the special orders are
taking longer than 42 days. A sample of 12 special orders delivered in the last month showed that the
mean waiting time was 51 days, with a standard deviation of 8 days.
a. At the 0.05 significance level, are customers waiting an average of more than 42 days

Step 1: State the null and alternate hypothesis:

Ho: µ ≤ 42
H1: µ > 42

Step 2: Select the level of significance:

α = 0.05

Step 3: Select the appropriate test statistic:

m
er as
Use t distribution.

co
eH w
t = [(x-bar - µ)]/[s/square root of n]

o.
Step 4: Formulate decision rule: rs e
ou urc
First, let’s find the critical value:
Since it’s one tailed test (H1 states a direction; “>”), go to Level of Significance for one-tailed test
o

(alpha = 0.05).
aC s
vi y re

df = n – 1 = 12 – 1 = 11; we find t = 1.796

Since H1: µ > 42, we’re dealing with right-tailed test. So, decision rule is as follows:
ed d

If t-computed is greater than 1.796, then Reject Ho.

ar stu

If t-computed is less than 1.796, then Do Not Reject Ho.

Step 5: Make a decision:

is

t = [(x-bar - µ)]/[s/square root of n]

Th

t = [(51 – 42)]/ [8/square root of 12] = 3.897

Since t-computed (3.897) is greater than t-critical (1.796), then Reject Ho

Fail to Reject H1
sh

µ > 42

Conclusion: At the 0.05 significance level, we can conclude that customers are waiting an average of
more than 42 days

This study source was downloaded by 100000834127178 from CourseHero.com on 11-13-2021 11:25:32 GMT -06:00

https://www.coursehero.com/file/64482715/Practice-Exercises-Solution-to-t-distributionsdoc/
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