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Hypothesis Testing and Absentee Rates

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Over the last year the absentee rate at a large corporation averaged 8.2 days absent with a standard deviation of 6 days. One department with 40 employees had an absentee rate of 12 days per employee. During an investigation the department head argued as follows "if you took 40 employees at random from the corporation, there is a pretty good chance the average number of days absent would be 12 or more. That's what happened to us-chance variation." Is this a good defense? Justify your answer.

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This solution explains and discusses hypothesis testing.

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We should look at the standard deviations. We see that the standard deviation is 6 days.

If the data follows the normal curve, there are strict quotas. Normally, 1 standard deviation from the mean will encompass 68% of people. That means that 68% of the people in the ...

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