A fast food franchiser is considering building a restaurant at a certain location. Based on financial analyses, a site is acceptable only if the number of pedestrian passing the location averages more than 100 per hour. The number
of pedestrians observed for each of 40 hours was recorded and stored in the attached excel file .
Assuming that the population standard deviation is known to be 12, can we conclude that the site is acceptable? (set your own significance level)
Solution. Denote the number of pedestrian passing the location per hour by X and assume that X follows normal distribution with mean and the standard deviation . By the definition that a site is acceptable only if the number of pedestrian passing the location averages more than 100 per hour, i.e., . So we can set up the following null ...
The following outlines the process of conducting a hypothesis test to determine if pedestrian traffic averages more than 100 per hour. statistics are computed in Excel and a detailed explanation is provided in a Word document. A z-test is used.