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Hypothesis Testing of Moving Production to Mexico

A big multinational corporation based in Toronto recently moved it's production facilities to Mexico. When the corporation was in Toronto, it had an older, experienced labour force with a mean age of 45 years. Now that it has moved to Mexico, the company wishes to find out if the average age of the workforce has declined. A sample of 35 employees is selected. The average age is found to be 40 years, with a standard deviation of five years. With a 0.05 level of significance, can we conclude that the mean age of the workforce has declined?

Solution Preview

Null Hypothesis: H0: M 1= M 2 Mean age of employees at Toronto and Mexico are the same
Alternative Hypothesis: H1: M 2 less than equal to M 1 Mean age of employees at Toronto and Mexico are different

Mean= M = 45 years =(Mean age of ...

Solution Summary

The hypothesis that the mean age of the workforce has declined is tested.

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