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Using the Five-Step Hypothesis Testing

Use the five-step hypothesis testing procedure to solve the following exercises.

21. The management of Discount Furniture, a chain of discount furniture stores in the Northeast, designed an incentive plan for salespeople. To evaluate this innovative plan, 12 salespeople were selected at random, and their weekly incomes before and after the plans were recorded.
Salesperson Before After
Sid Mahone $320 $340
Carol Quick 290 285
Tom Jackson 421 475
Andy Jones 510 510
Jean Sloan 210 210
Jack Walker 402 500
Peg Mancuso 625 631
Anita Loma 560 560
John Cuso 360 365
Carl Utz 431 431
A. S. Kushner 506 525
Fern Lawton 505 619

Was there a significant increase in the typical salesperson's weekly income due to the innovative incentive plan? Use the .05 significance level. Estimate the p-value, and interpret it.

Solution Preview

Solution.

H0: there is NO significant increase in the typical salesperson's weekly income due to the innovative incentive plan;

H1: there is a significant increase in the typical salesperson's weekly income due to the innovative incentive plan.

Salesperson Before After d=difference=after-before
Sid Mahone $320 $340 20
Carol Quick 290 285 -5
Tom Jackson 421 475 ...

Solution Summary

This solution provides calculations and explanations for hypothesis testing.

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