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Hypothesis Testing
McGraw-Hill/Irwin Copyright © 2014 by The McGraw-Hill Companies, Inc. All rights reserved.
Null and Alternative Hypotheses and Errors in
Hypothesis Testing
• Null hypothesis (H0)
– A statement of the basic proposition being tested.
The statement generally represents the status quo
and is not rejected unless there is convincing
sample evidence that it is false.
• Alternative or research hypothesis (Ha/H1)
– An alternative (to the null hypothesis) statement
that will be accepted only if there is convincing
sample evidence that it is true.
9-2
Example: Trash Bag Case
• Suppose that an independent laboratory has tested
trash bags and has found that no 30-gallon bags on
the market have a mean breaking strength of more
than 50 pounds. The producer of the new trash bag
feels sure that its 30-gallon bag will be the strongest
such bag on the market if the new trash bag’s mean
breaking strength can be shown to be greater than
50 pounds. The mean of the sample of 40 trash bag
breaking strengths is 50.575. Assume that the
standard deviation is 1.65.
Example:
Payment Time Case
• A consulting firm recently installed a new
electronic billing system. The company hopes
to decrease the bill payment time by more
than 50%. Using the old system, the mean bill
payment time was at least 39 days. Therefore,
the company believes that the new system
will reduce payment time to less than 19.5
days. From a sample of 65 payment times, the
average was 18.11 days. Assume that σ is 4.2
days.
Example: Valentine’s Day Chocolate
Case
• A candy company annually markets a special 18
ounce box of assorted chocolates to large retail
stores for Valentine’s Day. This year, the company
made an extra special box with a new assortment of
chocolates. The company projects that there will be a
10% increase in sales. Last year, the mean sales of
the stores was 300 boxes. The company wants to
know whether they should prepare for a 10%
increase in sales or not. From a sample of100 stores,
the average was 326 boxes. Assume that σ is 40
boxes.
Types of Alternative Hypotheses
• One-Sided, “Greater Than” Alternative
– Ha: µ > µ0
• One-Sided, “Less Than” Alternative
– Ha : µ < µ0
• Two-Sided, “Not Equal To” Alternative
– µ ¹ µ0
State of Nature
x - 50 50.575 - 50
z= = = 2.20
s n 1.65 40
– Using the z-table, the p-value is 0.0139
One-Sided, Greater Than Alternative:
Trash Bag Case
6. Decide whether to reject H0 by using the test
statistic and the rejection rule
a DECISION
0.1 Reject H0
0.05 Reject H0
0.01 Do not reject H0
0.001 Do not reject H0
7. There is strong evidence to support the claim that
the average breaking strength of all the new bags is
greater than 50 lbs.
Example: Payment Time Case