SMMD: Practice Problem Set 4 Solutions

1. (A) See the reasoning below.

A. True. H0: μ ≤ 80, HA: μ > 80. If the test rejects H0, then the data would have
provided enough evidence in favor of the new design in terms of higher
spending amounts than the current design.
B. False. The test rejects H0. This cannot be a Type II error since a Type II error
results from failing to reject.
C. False. The test rejects H0. If null hypothesis is false then we would not have
committed an error. However, if null hypothesis is true then we would have
committed a Type I error (the probability of which is the p-value).

2. (D) See the reasoning below

A. False. It is possible, but not necessary. Sampling variation could produce a

sample in which p is more than 0.4 even though  ≤ 0.4.
B. False. The p-value is the probability of incorrectly rejecting H0 and adding a
service that will not be profitable.

3. (B) The claim is that the medication is effective, i.e., μ > 10, which then becomes the
alternate hypothesis. Hence, the null hypothesis is that the therapy is not effective,
i.e., H0: μ ≤ 10. Note that the last two options are not correct because they form hypothesis
on sample statistics.

4. (B) The z score of 15.9 oz is (15.9-16.3)/0.2 = - 2. Pr (Z < -2) = 0.025. Thus, when the
process is going fine, with the mean weight at 16.3 oz, there is probability of 0.025
that a box with weight of 15.9 oz or less is observed. Consequently, when there is
nothing wrong with the process, there is a 2.5% chance that the system will be
stopped. This is the probability of Type I error.

5. (D) Since weight of each cereal box is independent, the probability of two
consecutive cereal boxes having weights below the threshold is (0.025) 2 =0.000625 .
That’s the probability of a Type I error in this case.

6. (A) Since the process was stopped, but no problem was found, we had a false alarm
or a Type I error.

7. (B) Here, a Type II error has occurred. This is because the mean withdrawal size has
increased. However, the sample mean fell within the limits, thereby failing to
recognize the change, and therefore a Type II error has occurred.

8. (D) Control limits for the process. To have  = 0.0027, the control limits will be
  3 σ/n = 100  30/n. With n = 10, LCL=90.51, UCL=109.49.