H0: µ < 11,161.61 H1: µ ≥ 11,161.61 If it is H0 Mi Casa should not continue to use the food truck, but if it is H1 then they are making profit and should. To test the statistic at a 0.05 level of significance we use the One Tail Hypothesis test. First we identify the null and alternative hypotheses, being H0: µ < 9500 and H1: µ ≥ 9500. next we set a value for the significance level, being 0.05, a common value used in hypothesis testing. Step 3 is to determine the appropriate critical value. Here our z score is 1.645. Step 4 is to calculate the appropriate test statistic. Since the standard deviation is known, we use the test statistic. This is the sample mean minus the mean of the sampling distribution which is assumed to be true for the null hypothesis, then divided by the standard deviation which is divided by the square root of the sample size.
11,161.61-9500/ (250/√20) = 1661.61/55.93 = 20.77 The next step is to compare the z statistic to the critical z score. This is used to decide whether or not to reject or fail to reject the null hypothesis. The z statistic is larger than the z score. The final step is to state your conclusions. Since the statistic is larger than the z score it will be profitable for Mi Casa to keep the seasonal food truck. SOURCE: Donnelly, R. A. (2012). Business statistics plus MyStatLab . Upper Saddle River, NJ: Pearson. Revenue $9,525.35 $9,633.55 $10,322.01 $15,011.50 $9,099.50 $10,342.22 $11,765.83 $8,325.40 $9,525.60 $10,622.60 $11,732.86 $13,455.55 $10,222.60 $9,626.40
$11,001.00 $15,235.65 $13,548.84 $10,249.71 $14,854.76 $9,131.22
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- Fall '12
- Statistics, Null hypothesis, Statistical hypothesis testing, Statistical power