99 2326

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Unformatted text preview: ull hypothesis H0 if: z > zc where zc is the critical value that satisfies: P(Z > zc ) = α That is zc is the value such that the upper tail probability from standard normal distribution is α . 5 Chapter 10 The critical value can be found by inspecting the table for the standard normal distribution given in Appendix Table 1 of the textbook. Alternatively, with Microsoft Excel, critical values can be found for the common choices of α as follows: α Microsoft Excel NORMSINV probability zc 0.10 0.90 1.282 0.05 0.95 1.645 0.01 0.99 2.326 Another way to look‐up the critical values is to use the Appendix Table for the t‐distribution and use the row with the label of ∞ (infinity) for the degrees of freedom. 6 Chapter 10 Example: Evaluating a New Production Process (Example 10.1, page 341 of the textbook). A manager will switch to a new technology if the production process exceeds 80 units per hour. The manager asks the company statistician to test the null hypothesis: H0 : μ ≤ 80 against the alternative hypothesis: H1 : μ > 80 If there is...
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