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# Testing hypotheses

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Details: Piggybank has narrowed its options down to two incentive plans: A. cash back when the consumer makes an online purchase; and B. cash back when the consumer makes a purchase at a clothing store. the bank doesn't know whether consumers would shop online more than at clothing stores.

Information experts has placed you in a group to develop NULL and ALTERNATIVE HYPOTHESES to help the bank determine which option would provide the best incentive to consumers. Work this out to develop the NULL and ALTERNATIVE HYPOTHESES, by writing a brief memo to the Piggybank product developing team describing your HYPOTHESES and explain how you arrived at it.

THE OBJECTIVES

USE EFFECTIVE COMMUNICATION TECHNIQUES AND FORMULATE NULL AND ALTERNATIVES HYPOTHESES FOR APPLICATION INVOLVING A SINGLE POPULATION MEAN, PROPORTION, OR VARIANCE.

Below are some detailed layout outlines:

1.explain hypothesis testing and how it works
2.give a hypothesis that will help Piggybank make their choices then convert this hypothesis to null and alternative format.
3.explain how this test will help piggybank make their decision
4.explain possible errors that can occur with hypothesis testing
5.make the final decision for piggybank assuming that your null hypothesis is correct
6.explain the final decision and how the null hypothesis helped you to reach this decision

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#### Solution Preview

Please see the attached file.

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Length: 1 page memo

Details: Piggybank has narrowed its options down to two incentive plans: A. cash back when the consumer makes an online purchase; and B. cash back when the consumer makes a purchase at a clothing store. the bank doesn't know whether consumers would shop online more than at clothing stores.

Information experts has placed you in a group to develop NULL and ALTERNATIVE HYPOTHESES to help the bank determine which option would provide the best incentive to consumers. Work this out to develop the NULL and ALTERNATIVE HYPOTHESES, by writing a brief memo to the Piggybank product developing team describing your HYPOTHESES and explain how you ...

#### Solution Summary

The solution contains detailed explanation of the standard procedure for testing hypotheses.

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## Testing Hypothesis at 0.05 Level

Given the following sample information, test the hypothesis that the treatment means are equal at the .05 significance level.

Treatment 1 Treatment 2 Treatment 3

8 3 3
11 2 4
10 1 5
3 4
2

A. State the null hypothesis and the alternate hypothesis.

B. What is the decision rule?

C. Compute SST, SSE, SS total.

D. Complete an ANOVA table.

E. State your decision regarding the null hypothesis.

F. If Ho is rejected, can we conclude that treatment 1 and treatment 2 differ? Use the 95% level of confidence.

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