Charlies_Case_Study - alternative hypothesis points to the...

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Charlie Mizer Shane Griffith By using the mean function on the data presented in the Excel spread sheet you can see that the first thing McDonalds is facing is overcome. The average desserts purchase for every 1,000 transactions is 165.6, this is 5.6 over the minimum limit set by the McDonalds management. The second question has a few problems, because it is asking to have a minimum of 200 dessert product purchases for every 1,000 transactions. The problem is we already know the average is only 165.6. Management has decided that this proportion must be over 15 percent. The significance level will be 0.05. Using hypothesis testing will allow us to tell whether or not a proportion of 15 percent is possible, or if management must come up with a new way to present the new dessert product. The first step of hypothesis testing is to state both the Null and Alternative hypotheses. The problem says we must exceed 0.15, so we know that our alternative hypothesis will be H 1 Π 0.15. This tells us that our null hypothesis is H 0 Π≤ 0.15. Since the greater than sign of our
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Unformatted text preview: alternative hypothesis points to the right, we will have a right-tailed test. We will use α =0.05 to determine the critical value point. Our critical value point is 1.645, so any number larger than that will tell us to reject the null hypothesis. Next we need to find the test statistic. Because we are working with a percentage we will use the formula: Z=P-pie divided by the square root of pie times 1-pie divided by n. We will plug in p, which is equal to, 200/1000, and pie which is equal to 0.15, and our n, which is equal to 1,000. By applying these numbers to the formula we get a test statistic of 4.43. This puts us inside the critical value of 1.645. From this we know to reject the null hypothesis, and show that we have sufficient evidence to prove that the proportion will exceed 0.15. This project shows that if McDonald’s wants to sell 200 dessert products for every 1,000 transactions with a proportion exceeding 0.15 it would be a good move to introduce this new dessert product to the menu....
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  • Spring '08
  • Harwood
  • Null hypothesis, Statistical hypothesis testing, McDonalds management, new dessert product, critical value point

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Charlies_Case_Study - alternative hypothesis points to the...

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