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Examples of One Sample Test of Hypothesis Testing Manufacturer’s Claims • X-15 steel-belted radial truck tire • Specs: • Lifetime of product (tread) • 60,000 miles +/- 5000 miles • Finley Trucking: • Purchased 48 tires for fleet. • Substantial wear after 58,000 miles! Is Finley’s experience with the tires consistent with the claims of the manufacturer? What we know • The manufacturer claims the mean life is 60,000 miles • The standard deviation is 5,000 miles • Finley Trucking bought 48 tires • The mean life of the tires Finley purchased was 58,000 miles • Step 1: State the Hypothesis • There is no significant difference from the manufacturer’s claims and the experience of Finley Trucking. That is, the mean is at least as good as the manufacturer claims, and perhaps even better. Ho: μ ≥ 60000 • The alternative is that the mean is less than 60,000 miles. Ha: μ < 60000 • Step 2: Select a level of significance Probability of rejecting Ho, when it is actually true. Also known as a Type I Error α = 5% = 0.05 (we want this to be as low as practical) • Step 3: State the Test Statistic • Things to consider: • Is the population standard deviation known? • Yes: use the Standard Normal Probability Distribution • No: use the Student’s t Probability Distribution Population Standard Deviation Known • Step 4: Formulate the Decision Rule • A statement of the specific conditions that must be met for the null hypothesis, Ho, to be rejected. • One-Tailed Test • α = 0.05 • σ is known. • Rejection region for a one-tailed test is always in the tail “pointed at” by the Ha. Ha: u < 60000, so… Reject Ho if Z < -1.645 • Step 5. Compute the value of the test statistic • Step 6: Make a decision • REJECT Ho • The calculated value of the test statistic was less than the critical value of Z • Step 7: Interpret the Results There is sufficient statistical evidence at the 5% significance level to reject the null hypothesis, in favor of the alternative hypothesis that the mean tread life of the X-15 steel-belted radial truck tire is less than 60,000 miles. Ace Carts: Is there any difference is assembly times? On average it takes 42.3 minutes to assemble the J2+2Sport New method: 6 carts assembled mean = 44.5 minutes std.dev. = 2.7 minutes Step 1. State the hypothesis Ho: μ = 42.3 minutes Ha: μ ≠ 42.3 minutes two-tailed test! Step 2. Level of Significance α = 0.05 Step 3. Test Statistic μ is not known Step 4. Rejection region • Two-Tailed Test, σ unknown • Significance level • α = 0.05 • Degrees of Freedom • n=6 • df = n - 1 = 5 • Critical value: • 2.571 Reject Ho if t < -2.571, or if t > 2.571 Step 5: Calculate the test statistic On average it takes 42.3 minutes to assemble the J2+2Sport New method: 6 carts assembled mean = 44.5 minutes std.dev. = 2.7 minutes Step 6. Decision Fail to reject Ho Why? The calculated value of the test statistic, 1.996, does not fall within either rejection region. Ace Carts: Is there any difference is assembly times? There is insufficient statistical evidence at the 5% significance level to reject the null hypothesis that the new assembly time is the same as the old assembly time of 42.3 minutes.