Hypothesis Testing

Two-Tailed Test Left-Tailed Test Right-Tailed Test

Sign in the null = = or ≥ = or ≤
hypothesis H0
Sign in the alternate ≠ < >
hypothesis Ha
Rejection region In both tails In the left tail In the right tail
Critical value is ± Critical value is -ve Critical value is +ve

Formulae
Mean σ known
x̄ - μ
zcalculated = σ
x̄
σ x̄= σ
√n
Where
x̄ = Sample mean
μ = Population mean
σ x̄ = Standard error of mean / Standard Deviation of the Sample Means
n
If > 0.05 use FCF
N
N−n
FCF =
√ N−1
σ x̄ = σ x FCF
√n
x̄ - μ
Zcalculated = σ
x̄
Where
x̄ = Sample mean
μ = Population mean
σ x̄ = Standard error of mean / Standard Deviation of the Sample Means
N = Population size
n = Sample size
FCF = Finite Correction Factor or Finite Multiplication Factor

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 Hypothesis Testing

Mean σ not known, sample size small < 30

Use T Distribution
x̄ - μ
Tcalculated =
s x̄
s
s x̄=
√n
Where
x̄ = Sample mean
μ = Population mean
s x̄ = Standard error of mean / Standard Deviation of the Sample Means

Proportion
p^ - p
Zcalculated = σp^

p xq
σp^ =
√ n

where
p^ = sample proportion
σp^ = Standard error of sample proportion
n = sample size
p = population proportion
q=1-p

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 Hypothesis Testing

1. A telephone company provides long-distance telephone service in an area. According to

the company’s records, the average length of all long-distance calls placed through this
company in 2009 was 12.44 minutes. The company’s management wanted to check if
the mean length of the current long-distance calls is different from 12.44 minutes. A
sample of 150 such calls placed through this company produced a mean length of 13.71
minutes. The standard deviation of all such calls is 2.65 minutes. Using the 2%
significance level, can you conclude that the mean length of all current long-distance
calls is different from 12.44 minutes?

2. A survey of the morning beverage market shows that the primary breakfast beverage for
17% of Americans is milk. A milk producer in Wisconsin, where milk is plentiful, believes
the figure is higher for Wisconsin. To test this idea, a researcher contacts a random
sample of 550 Wisconsin residents and asks which primary beverage they consumed for
breakfast that day. 115 replied that milk was the primary beverage. Using a level of
significance of 0.05, test the idea that the milk figure is higher for Wisconsin.

3. A manufacturer of hooks for cranes used for lifting gold rods/ingots claims that the mean
breaking strength of his hooks is more than 500 kg. A sample of 10 hooks was randomly
drawn and the mean breaking strength of these hooks turned out to be 490 kg with a
standard deviation of 12 kg. Can you accept the claim of the manufacturer at 5 %
significance level?
t Value for one tailed
5% for 9 d.f. = 1.833
5% for 10 d.f. = 1.812

t Value for two tailed

5% for 9 d.f. =2.262
5% for 10 d.f. =2.228

4. Royal Tyres has launched a new brand of tyres for tractors and claims that under normal
circumstances the average life of the tyres is 40,000kms. A retailer wants to test this
claim and has taken a random sample of 8 tyres and tests the tyres under normal
circumstances. The results obtained are as below. Use α=0.05 for testing the hypothesis
Tyres 1 2 3 4
Kms 35,000 38,000 42,000 41,000
Tyres 5 6 7 8
Kms 39,000 41,500 43,000 38,500

5. The MacDonald restaurant chain claims that the waiting time of customers for service is
normally distributed, with a mean of 3 minutes and a standard deviation of 1 minute. The
quality-assurance department found in a sample of 50 customers at the Mani-Square
MacDonald outlet that the mean waiting time was 2.75 minutes. At the.05 significance
level, can we conclude that the mean waiting time is less than 3 minutes?

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6. A large auto parts manufacturers investigated the service it received from suppliers and
discovered that in the past, 30% of all materials shipments were received late, The
company installed a just-time system in which suppliers are linked more closely to the
manufacturing process. A random sample of 150 deliveries reveals that 42 deliveries
were late. Test at 10% level of significance Whether there is a significant reduction in
proportion of late deliveries.

7. A pharmaceutical firm maintains that the mean time for a drug to take effect is 24
minutes. In a sample of 400 trials, the mean time is 26 minutes with a standard deviation
of 4 minutes. Test the hypothesis that the mean time is 24 minutes against the alternative
that it is not equal to 24 minutes. Use a level of significance of 0.05.

8. The percentage of female employees in a particular company is known to be 30 percent,

The company wants to increase the proportion of females in the workforce and initiates a
number of initiatives towards this end. After the campaign is over, a survey of 100
employees shows that 35 of them are females. Can the company conclude at 5% level of
significance that its initiatives have borne fruit?

9. In India, color tv (CTV) market has grown rapidly and is estimated to reach 21 million
units by 2014-2015. 30% of the market is catered to by 20” CTVs. A researcher believes
that the market size for 20” CTVs has increased. For testing this belief the researcher
has taken a random sample of 130 CTV purchasers. Out of 130 purchasers, 50
purchased 20” CTVs. Use α=0.05 for testing the hypothesis.

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