C9-Hypothesis Testing-FO - HYPOTHESIS TESTING*Now we will...

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HYPOTHESIS TESTING*Now we will start a series of chapters about Hypothesis Testing. *The current chapter is *extremely* important because it provides logic and the basis for the methods used in the subsequent chapters.*At first, many students find this material difficult. To understand the hypothesis testing process, you may need to read the notes and go through the examples a few times. You definitely will need to practice the questions.*The good news is that once the basic hypothesis testing process makes sense to you, the subsequent chapters will be very easy to understand. Here is the typical format of a hypothesis test question:As manager of a restaurant that delivers pizza to college dorms, you wonder if the time between ordering and completion of delivery differs from the current population mean of 25 minutes. From past experience you can assume that the population standard deviation is 6 minutes. A sample of 36 orders using the new delivery process yields a sample mean of 22.4 minutes. At the 0.05 level of significance, is there evidence that the mean delivery time differs from the previous population mean value of 25?!Yikes! As you can see, there is a lot of information provided in the question. But as always, don’t panic. I will walk you through the process step by step.
Here is an overview of the steps for hypothesis testing. When solving problems you might find this sheet a handy step to step guide. Steps:0. Identify information given in the question. 1. Select appropriate test statistic2. State Hypotheses: (Null and Alternative)3. Determine critical value(s) and state decision rules.4. Collect data and compute test statistic5. a. Make a Decision :- either reject the null - or fail to reject (FTR) the null.b. State the managerial conclusionNow let’s go through the above the steps one by one.
Step 0: IDENTIFY INFORMATAION GIVEN IN QUESTIONAs manager of a restaurant that delivers pizza to college dorms, you wonder if the time between ordering and completion of delivery differs from the current population mean of 25 minutes. From past experience you can assume that the population standard deviation is 6 minutes. A sample of 36 orders using the new delivery process yields a sample mean of 22.4 minutes. At the 0.05 level of significance, is there evidence that the mean delivery time differs from the previous population mean value of 25?
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