Meek Industries: Accounts in Arreers for More than Three Months
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Tina Dennis is the comptroller for Meek Industries. She believes that the current cash-flow problem at Meek is due to the slow collection of accounts available. She believes that more than 60% of the accounts are in the arrears more than three months. A random sample of 200 accounts showed that 140 were more than three months old. At the .01 significance level, can she conclude that more than 60% of the accounts are in arrears for more than three months?
Define hypothesis (Ho and Ha)
Select level of significance
Identify test statistic
Formulate decision - Reject or Accept H0, Ha.
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Solution Summary
This solution provides answers in Excel for defining a hypothesis, selecting levels of significance, identifying test statistics, and formulating a decision.
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Solution. Denote by p the proportion of the accounts are in arrears for more than three months. So, we would test
Step 1:
Null hypothesis H0: p<=60%
Alternative hypothesis Ha: p>60%
Step 2: The significance level
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Education
- BSc , Wuhan Univ. China
- MA, Shandong Univ.
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- "Your solution, looks excellent. I recognize things from previous chapters. I have seen the standard deviation formula you used to get 5.154. I do understand the Central Limit Theorem needs the sample size (n) to be greater than 30, we have 100. I do understand the sample mean(s) of the population will follow a normal distribution, and that CLT states the sample mean of population is the population (mean), we have 143.74. But when and WHY do we use the standard deviation formula where you got 5.154. WHEN & Why use standard deviation of the sample mean. I don't understand, why don't we simply use the "100" I understand that standard deviation is the square root of variance. I do understand that the variance is the square of the differences of each sample data value minus the mean. But somehow, why not use 100, why use standard deviation of sample mean? Please help explain."
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