Ch11 - Chapter 11 Introduction to Hypothesis Testing 1 11.1...

Info iconThis preview shows pages 1–10. Sign up to view the full content.

View Full Document Right Arrow Icon
1 Introduction to Hypothesis Testing Chapter 11
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
2 11.1 Introduction The purpose of hypothesis testing is to determine whether there is enough statistical evidence in favor of a certain belief about a parameter. Examples Is there statistical evidence in a random sample of potential customers, that support the hypothesis that more than 10% of the potential customers will purchase a new products? Is a new drug effective in curing a certain disease? A sample of patients is randomly selected. Half of them are given the drug while the other half are given a
Background image of page 2
3 11.2 Concepts of Hypothesis Testing The critical concepts of hypothesis testing. Example: An operation manager needs to determine if the mean demand during lead time is greater than 350. If so, changes in the ordering policy are needed. There are two hypotheses about a population mean: This is what you want to prove
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
4 11.2 Concepts of Hypothesis Testing μ = 350 Assume the null hypothesis is true ( μ = 350). Sample from the demand population, and build a statistic related to the parameter hypothesized (the sample mean). Pose the question: How probable is it to obtain a sample mean at least as extreme as the one observed from the sample, if
Background image of page 4
5 Since the is much larger than 350, the mean μ is likely to be greater than 350. Reject the null hypothesis. x 355 = x 11.2 Concepts of Hypothesis Testing μ = 350 Assume the null hypothesis is true ( μ = 350). 450 = x In this case the mean μ is not likely to be greater than 350. Do not reject the null hypothesis.
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
6 Types of Errors Two types of errors may occur when deciding whether to reject H 0 based on the statistic value. – Type I error: Reject H 0 when it is true. – Type II error: Do not reject H 0 when it is false. Example continued – Type I error: Reject H 0 ( μ = 350) in favor of H 1 ( μ > 350) when the real value of μ is 350.
Background image of page 6
7 Controlling the probability of conducting a type I error Recall: – H 0 : μ = 350 and H 1 : μ > 350. – H 0 is rejected if is sufficiently large Thus, a type I error is made if when μ = 350. By properly selecting the critical value we can limit the probability of conducting a type I error to an acceptable level. x value critical x Critical value
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
8 11.3 Testing the Population Mean When the Population Standard Deviation is Known Example 11.1 A new billing system for a department store will be cost- effective only if the mean monthly account is more than $170. A sample of 400 accounts has a mean of $178. If accounts are approximately normally distributed with σ = $65, can we conclude that the new system will be cost effective?
Background image of page 8
9 Example 11.1 – Solution The population of interest is the credit accounts at the store. We want to know whether the mean account for all customers is greater than $170.
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 10
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 06/06/2011 for the course ADMS 2320 taught by Professor Rochon during the Spring '08 term at York University.

Page1 / 49

Ch11 - Chapter 11 Introduction to Hypothesis Testing 1 11.1...

This preview shows document pages 1 - 10. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online