Testing Hypothesis Problems
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Suppose a new production system will be implemented if a hypothesis test support the conclusion that the new system increase production.
a) state the appropriate null and alternative hypotheses if the mean production of the current system is 400 units per hour.
b) what is Type I error in this situation? what are the consequences of making this error?
c) what is Type II error in this situation? what are the consequences of making this error?
d) the new system was monitored for 40 hours and showed a mean production rate of 410 units per hour. based on prior experience a population standard deviation of σ = 50 units can be used. what is the hypothesis test conclusion using a .05 level of significance? should the new system be implemented?
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Solution Summary
The solution provides step by step method for the calculation of test statistic . Formula for the calculation and Interpretations of the results are also included.
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Suppose a new production system will be implemented if a hypothesis test supports the conclusion that the new system increase production.
a) State the appropriate null and alternative hypotheses if the mean production of the current system is 400 units per hour.
H0: Mean production ≤ 400 units per hour
H1: Mean production > 400 units per hour
b) What is Type I error in this situation? What are the consequences of making this error?
Type I error is committed when rejecting the null ...
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