Business Statistics

(LCDA)

T-test for Independence

The nicotine content of two brands of cigarette measured in milligrams , has found
as follows
A B
22 14.1
24 20.6
26.4 23.1
25.4 22.5
24.9 24
23.7 36.2
26.1 21.6
23.3

1)
Ho: 1= 2 The nicotine content of two brands of cigarette are equal.
Ha: 1 2 The nicotine content of two brands of cigarette are not equal.

2) T-test, two-tailed
3) =0.05
4) Reject Ho of |tc|>ttab , otherwise fail to reject Ho
5) X 1 =24.48
X 2 = 23.10
2
S 1=2.245
S22= 43.712

2 2
s 1+ s2 2.245+ 43.712
2
sp =
2 = 2 = 22.48

x 1x 2 24.4823.10
tc =
s2 p ( n1 + n1 )
1 2
=
22.48 ( 18 + 17 ) = 0.531

0.05
ttab = n +n 2
2 ,( 1 2 = 2 , (8+7-2) = 0.025, 13 = 2.160

6) Fail to reject since |tc|= 0.531 < ttab =2.160

7) Data provided evidences that the two brands of cigarette has equal nicotine
content.
Implication:
Business Statistics
(LCDA)

The study uses t-test for independence because it compares the two things for
difference. As for the result, it can be said that if two cigarette have an equal
nicotine content, then both have an addictive effect on who uses it.
Business Statistics
(LCDA)

ANOVA
A company has 3 manufacturing plants, and company officials want to determine
whether there is a significant difference in the average age workers at the three
locations. The following data are the ages of five randomly selected workers at each
plant. Use 5% level of significance.

1 2 3
29 32 25
27 33 24
30 31 24
27 34 25
28 30 26

1)
Ho: 1= 2= 3 The average age of workers of the 3 plants has no significant
difference.
Ha: At least one of the plant has a different average age of
worker.
2) F-test
3) =0.05
4) Reject Ho of Fc>Ftab , otherwise fail to reject Ho
2 2
( grand total ) (425)
5) CF = n = 15 = 12,041.67

[ ]
2 2 2
141 160 124
SSB= + + 12,041.67 = 12,171.4 12,041.67 = 129.73
5 5 5

TSS= x 2CF = 12,191 12,041.67 = 149.33

SS df MS Fc Ftab
Between 129. 2 129.73 64. 865 0.05, 2, 12
group 73 MSB= 2 Fc = 1.633 = = 3.885

= 64.865 39.73
Within group 19.6 12 19.6
0 MSW= 12 =

1.633
Total 149. 14
33

6) Reject Ho since Fc= 39.73 > Ftab=3.885

7) Data provided evidences that at least one of the plant has a different average
age of workers.
Business Statistics
(LCDA)

Implication:
ANOVA is used since it has more than two population mean and it wants to measure
the significant difference between the means. The results provided that at least one
of the plant has a different mean age of workers. It can be implied that since one
has different mean age, the company official will probably apply different decision
for that plant. It can be for benefits or for restructuring.
Business Statistics
(LCDA)

Chi-Square

Stress Level
Commuting
High Moderate Low Total
TIme
Under 15
9 5 18 32
minutes
15-45 minutes 17 8 28 53
Over 45
18 7 7 32
minutes
Total 44 20 53 117
=0.05
1)
Ho: The stress level is independent from the commuting time.
Ha: The stress level is dependent on the commuting time.
2) Chi-square
3) =0.05

4) Reject Ho if x 2c > x 2tab , otherwise fail to reject Ho

5)

Stress Level
Commuting TIme High Moderate Low Total
Under 15
9 5 18 32
minutes(O)
(r n )(c n)
E= T 12.03 5.47 14.5

15-45 minutes (O) 17 8 28 53

(r n )(c n)
E= T 19.93 9.06 24.01

Over 45 minutes
18 7 7 32
(O)
(r n )(c n)
E= T 12.03 5.47 14.5

Total 44 20 53 117

( OE )2
x 2c = = 0.763 + 0.04 + 0.845 + 0.431 + 0.124 + 0.663 + 2.963 +
E
0.428 + 3.879 = 10.136
Business Statistics
(LCDA)
2
x tab = , (r-1), (c-1) = 0.05, 2 ,2 = 0.05, 4 = 9.488

6) Reject Ho since x 2c =10.136 > x 2tab = 9.488

7) Data provided evidences that stress level is dependent on commuting time.

Implication:
Chi-square is used since the problem wants to know the significant relationship
between two unrelated variable where the variables are ordinal and nominal. It can
be implied that the longer the commuting time, the higher the stress level and vice
versa. Maybe thats why people who are stuck in the traffic are more irritable
especially when road accidents occur during traffics.
Correlation Analysis
Compute the value of the correlation for the data obtained in the study of the
number of TV ads aired per week and the amount of sales of a product.

Number of
Product Sales(y)
Ads(x)
A 2 2
B 5 4
C 8 7
D 8 6
E 10 9
F 12 10

xy = 338

x = 45

y = 38

x2 = 401

y2 = 286

n=6
Business Statistics
(LCDA)
2
x 2( x)
n

6 (338)( 45)(38) 318
[
n y ( y )
2 2
] = = 321.92 = 0.99
[ 6 ( 401 )(45) ][ 6 (286)( 38) ]
2 2

n xy( x)( y)
r=

Very strong positive correlation

Conclusion: Theres a very strong positive correlation between the number of ads
and the amount of sales.
Implication: Since it has a very strong correlation, it means that theres a significant
relationship between the two variables. Also, being positively correlated, it means
that it has a direct relationship. Meaning, the higher the number of ads, the amount
of sales increases and vice versa. So if the company aims to have a high amount of
sales, they should increase the number of ads.