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Fundamentalsof Hypothesis

@ Oxford Cereals,Part II

Null andAlternativeHypotheses FORTHE MEAN (o UNKNOWN)
CriticalValueof the TestStatistic TheCriticalValueApproach
of Rejectionand Nonrejection Thep-ValueApproach
in DecisionMaking UsingHypothesis- CheckingAssumptions
THEMEAN (o KNOWN) TheCriticalValueApproach
CriticalValueApproachto HypothesisTesting Thep-Value Approach
p-ValueApproachto Hypothesis Testing
Estimationand HypothesisTesting
p-ValueApproach E9.l UsingtheZTestfor theMean(o Known)
E9.2 UsingtheI Testfor theMean(o Unknown)
E9.3 UsingtheZTestfor theProportion

In this chapter,you learn:

r The basicprinciplesof hypothesis testing
I How to usehypothesis testingto testa meanor proportion
r The assumptionsof eachhypothesistestingprocedure,how to evaluatethem,
andthe consequences ifthey areseriouslyviolated
r How to avoidthe pitfalls involvedin hypothesistesting
r Ethicalissuesinvolvedin hypothesis testing
328 CHAPTERNINE Fundamentals
of Hypothesis
Testing: Tests

Using Statistics@ Oxford Cereals,Part ll

As in Chapter7, you againfind yourselfasplant operations
Oxford Cereals.You are responsiblefor monitoring the amountin
cerealbox filled. Companyspecificationsrequire a mean weightof
gramsper box. It is your responsibilityto adjustthe processwhen
meanfill weight in the populationof boxesdeviatesfrom 368 grams.
can vou rationallvmakethe decisionwhetheror not to adiustthe
when it is impossibleto weigheverysinglebox as it is beingfilled?
begin by selectingand weighing a random sampleof 25 cereal
After computinga samplemean,how do you proceed?

]n Chapter7. you learnedmethodsto determinewhethera samplemeanis consistent

Iknown populationmean.In this Oxford Cerealsscenario,you seekto usea samplen
validatea claim aboutthe populationmean,a somewhatdifferentproblem.For this
problem,you usean inferentialmethodcalledhypothesistesting.Hypothesistesting
that you statea claim unambiguously.In this scenario,the claim is that the population
368 grams.You examinea samplestatisticto seeif it bettersupportsthe statedclaim,
null hypothesis,or the mutually exclusivealternative(for this scenario,that the
meanis not 368 grams.)
In this chapter,you will learn severalapplicationsof hypothesistesting.Youwill learn
to make inferencesabouta populationparameterby analyzingdffirences betweenthe
observed,the samplestatistic,and the resultsyou would expectto get if some
hypothesiswere actuallytrue. For the Oxford Cerealsscenario,hypothesistestingwould
you to infer oneof the following:
r The meanweight of the cerealboxesin the sampleis a value consistentwith
would expectif the meanof the entirepopulationof cerealboxesis 368 grams.
r The populationmeanis not equalto 368 gramsbecausethe samplemeanis si
different from 368 srams.

Hypothesistestingtypically beginswith sometheory,claim, or assertionabouta particular
meterof a population.For example,your initial hypothesisaboutthe cerealexampleis
processis working properly,so the meanfill is 368 grams,andno correctiveactionis

The Null and Alternative Hypotheses

The hypothesisthat the populationparameteris equalto the companyspecificationis
to asthe null hypothesis.A null hypothesisis alwaysone of statusquo and is identified
symbolHo. Here the null hypothesisis that the filling processis working properly,and
fore the meanfill is the 368-gramspecification.This is statedas

: :368

Even though information is availableonly from the sample,the null hypothesisis written in
terms of the population.Remember,your focus is on the populationof all cerealboxes.The
samplestatisticis usedto make inferencesaboutthe entire filling process.One inferencemay
be that the resultsobservedfrom the sampledataindicatethat the null hypothesisis false.If the
null hypothesisis considered false,somethingelsemustbe true.
Whenevera null hypothesisis specified,an alternativehypothesisis also specified,and it
mustbe true if the null hypothesisis false.The alternativehypothesis,Ilr, is the oppositeof
the null hypothesis,/10.This is statedin the cerealexampleas


The alternativehypothesisrepresents the conclusionreachedby rejectingthe null hypothesis. The

null hypothesisis rejectedwhenthereis sufficientevidencefrom the sampleinformationthat the
null hypothesisis false.In the cerealexample,if the weightsof the sampledboxesaresufficiently
aboveor belowthe expected368-grammeanspecifiedby the company,you rejectthenull hypoth-
esisin favor of the alternativehypothesisthat the meanfill is differentfrom 368 grams.You stop
productionandtakewhateveractionis necessary to correctthe problem.If the null hypothesisis
not rejected,you shouldcontinueto believein the statusquo,thatthe processis workingcorrectly
andthereforeno correctiveactionis necessary. In this secondcircumstance, you havenot proven
that the processis working correctly.Ratheqyou havefailed to provethat it is working incorrectly,
andthereforeyou continueyour belief(althoughunproven)in the null hypothesis.
In the hypothesis-testing methodology,the null hypothesisis rejectedwhenthe sampleevi-
dencesuggeststhat it is far more likely that the alternativehypothesisis true. However,failure
to rejectthe null hypothesisis not proofthat it is true.You canneverprovethat the null hypoth-
esisis correctbecausethe decisionis basedonly on the sampleinformation,not on the entire
population.Therefore,ifyou fail to rejectthe null hypothesis,you can only concludethat there
is insufficient evidenceto warrant its rejection.The following key points summarizethe null
and alternativehypotheses:
. The null hypothesis,i1s, representsthe statusquo or the currentbeliefin a situation.
' The alternativehypothesis,F/,, is the oppositeofthe null hypothesisand representsa
researchclaim or specific inferenceyou would like to prove.
, Ifyou rejectthe null hypothesis,you havestatisticalproofthat the alternativehypothesisis
r Ifyou do not rejectthe null hypothesis,you havefailed to provethe alternativehypothesis.
The failure to prove the alternativehypothesis,however,doesnot meanthat you have
proventhe null hypothesis.
r The null hypothesis,116,alwaysrefersto a specifiedvalue of the populationparameter
(suchasp), not a samplestatistic(suchas X).
r The statementof the null hypothesisalwayscontainsan equalsign regardingthe specified
valueof thepopulationparameter(for example,Ho: $:368 grams).
. The statementof the alternativehypothesisnevercontainsan equal sign regardingthe
specifiedvalueof the populationparameter(for example,Hi V * 368 grams).


You arethe managerof a fast-foodrestaurant.You want to determinewhetherthe waiting time
to placean orderhaschangedin the pastmonth from its previouspopulationmeanvalueof 4.5
minutes.Statethe null and alternativehypotheses.
SOLUTION The null hypothesisis that the populationmeanhasnot changedfrom its previ-
ousvalueof 4.5 minutes.This is statedas

Ho: trt:4.5
330 CHAPTERNINE Fundamentals
of Hypothesis

The alternative hypothesis is the opposite of the null hypothesis. Because the null
that the populationmeanis 4.5 minutes,the alternativehypothesisis that the population
is not 4.5 minutes.This is statedas

Hr: 1t+4.5

The Critical Value of the Test Statistic

The logic behind the hypothesis-testing methodologyis to determinehow likely the
hypothesisis to be true by consideringthe informationgatheredin a sample.In the
CerealCompanyscenario,the null hypothesisis that the meanamountof cerealper box
the entire filling processis 368 grams (that is, the populationparameterspecifiedby
company).You selecta sampleof boxesfrom the filling process,weigh eachbox, and
pute the samplemean.This statisticis an estimateof the corresponding parameter(the
ulation mean,p). Even if the null hypothesisis true, the statistic(the samplemean,
likely to differ from the value of the parameter(the population mean,p) becauseof vari
dueto sampling.However,you expectthe samplestatisticto be closeto the population
meterif the null hypothesisis true. If the samplestatisticis closeto the population
ter, you haveinsufficientevidenceto rejectthe null hypothesis.For example,if the
mean is 367.9,you concludethat the populationmean has not changed(that is, p:
becausea samplemeanof 367.9 is very closeto the hypothesizedvalue of 368. Intui
you think that it is likely that you could get a samplemeanof 367.9from a population
meanis 368.
However,if there is a large differencebetweenthe value of the statisticand the
sizedvalue of the populationparameter,you concludethat the null hypothesisis false.
example,if the samplemeanis 320, you concludethat the populationmeanis not 368 (that
p I 368), becausethe samplemean is very far from the hypothesizedvalue of 368. In such
case,you concludethat it is very unlikely to get a samplemeanof 320 if the population
is really 368.Therefore,it is more logical to concludethat the populationmeanis not equal
368.Hereyou rejectthe null hypothesis.
Unfortunately,the decision-makingprocessis not alwaysso clear-cut.Determining
is "very close" and what is "very different" is arbitrary without clear definitions. H
testing methodologyprovidesclear definitions for evaluatingdifferences.Furthermore,
enablesyou to quantify the decision-makingprocessby computingthe probability of getting
given sampleresult if the null hypothesisis true.You calculatethis probability by determini
the samplingdistribution for the samplestatistic of interest(for example,the sample
andthencomputingthe particulartest statisticbasedon the givensampleresult.Because
samplingdistribution for the test statisticoften follows a well-known statisticaldistributi
suchas the standardizednormal distribution or I distribution. vou can use thesedistributi
to help determinewhetherthe null hypothesisis true.

Regionsof Rejectionand Nonrejection

The samplingdistributionof the test statisticis divided into two regions,a region of re
(sometimes calledthe criticalregion)anda region of nonrejection(seeFigure9.1).
Ifthe test statisticfalls into the region ofnonrejection,you do not rejectthe null h
sis. In the Oxford Cerealsscenario.vou concludethat there is insufficient evidencethat
populationmeanfill is differentfrom 368 grams.If the test statisticfalls into the rej
region,you rejectthe null hypothesis.In this case,you concludethat the populationmeanis
368 erams.
Methodology 33 I
9.1: Hypothesis-Testing

ionsof rejection
nonrejection in
is testing

Critical Critical
Value Value
Regionof Regionof Regionof
Rejection Nonrejection Rejection

The regionof rejectionconsistsof the valuesof the teststatisticthat areunlikelyto occur

if the null hypothesisis true. Thesevaluesare more likely to occur if the null hypothesisis
false.Therefore,ifa value ofthe test statisticfalls into this rejectionregion,you rejectthe null
hypothesisbecausethat value is unlikely if the null hypothesisis true.
To make a decisionconcerningthe null hypothesis,you first determinethe critical value
ofthe teststatistic.The criticalvaluedividesthe nonrejectionregionfrom the rejectionregion.
Determiningthis critical valuedependson the sizeof the rejectionregion.The sizeof the rejec-
tion regionis directly relatedto the risks involvedin using only sampleevidenceto makedeci-
sionsabouta populationparameter.

Risksin DecisionMaking Using Hypothesis-Testing

When using a samplestatisticto make decisionsabouta populationparameter,there is a risk
that you will reachan incorrect conclusion.You can make two different types of errorswhen
applyinghypothesis-testing methodology,TypeI andTypeII errors.

A Type I error occursifyou rejectthe null hypothesis,I1o,when it is true and shouldnot

be rejected.The probability of a TypeI error occurringis c.
A Type II error occursifyou do not rejectthe null hypothesis,F16,when it is falseand
shouldbe rejected.The probability ofa TypeII error occurringis p.

In the Oxford Cerealsscenario,you makea TypeI error if you concludethat the population
meanfill is not 368 when it ls 368. This error causesyou to adjustthe filling processeven
thoughthe processis working properly.You makea TypeII error if you concludethat the pop-
ulationmeanfill ls 368when itis not 368.Here,you wouldallowtheprocessto continuewith-
out adjustmenteventhoughadjustmentsareneeded.

The Level of Signiftcance (a) The probability of committinga TypeI error,denotedby

a (the lowercaseGreekletter alpha), is referredto as the level of significance of the statistical
test.Traditionally,you control theTypeI error by decidingthe risk level, o, that you arewilling
to havein rejectingthe null hypothesiswhen it is true. Becauseyou speci$ the level of signif-
icancebeforethe hypothesistest is performed,the risk of committinga Type I error, cr, is
directlyunderyour control.Traditionally,you selectlevelsof 0.01, 0.05,or 0.10.The choiceof
a particularrisk level for making a Type I error dependson the cost of making a Type I error.
After you specify the value for ct, you can then determinethe critical valuesthat divide the
rejectionand nonrejectionregions.You know the size ofthe rejectionregion becausec is the
probabilityof rejectionwhen the null hypothesisis true. From this, you can then determine
the critical valueor valuesthat divide the reiectionand nonreiectionresions.
332 CHAPTER NINE Fundamentalsof HypothesisTesting:One-SampleTests

The ConJidence Cofficienl Thecomplement of theprobabilityof aTypeI error,(1

is calledtheconfidence Whenmultipliedby l00o/o,
coefficient. theconfidence coefficient
the confidencelevelthat was studiedwhenconstructinsconfidenceintervals(seeSection8.

The confidencecoefficient, (1 - cr),is the probability that you will not rejectthe null
hypothesis,F1o,when it is true and shouldnot be rejected.The confidence level of a
hypothesistestis (l - cr)x 100%.

In termsof hypothesis-testing methodology. the confidencecoefficientrepresents

probabilityof concludingthatthe valueof theparameter asspecifiedin the null
plausiblewhenit is true. In the Oxford Cerealsscenario,the confidencecoefficient
the probabilityof concludingthat the populationmeanfill is 368 gramswhen it is

The $ Risk The probabilityof committinga TypeII error is denotedby B (the

Greekletter beta).Unllke a TypeI error, which you control by the selectionof cr,the
ity of making a Type II error dependson the differencebetweenthe hypothesizedand
valuesof the populationparameter.Becauselarge differencesare easierto find than
ones,ifthe differencebetweenthe hypothesized andactualvaluesofthe population
is large,B is small.For example,if the populationmeanis 330 grams,thereis a small
(P) that you will concludethat the meanhasnot changedfrom 368.However,if thedi
betweenthe hypothesized and actualvaluesof the parameteris small,B is large.For
if the populationmeanis actually367 grams,thereis alargechance(B) that you will
thatthe meanis still 368 srams.

The Power of a Test The complementof theprobabilityof a TypeII error,(l - p), is

the powerof a statisticaltest.

The power of a statistical test, (l - B), is the probability that you will rejectthe null
hypothesiswhen it is falseand shouldbe rejected.

In the Oxford Cerealsscenario,the powerof the test is the probabilitythat you will
rectlyconcludethat the meanfill amountis not 368 gramswhen it actuallyis not 368
For a detaileddiscussionof thepowerof the test,seeSection9.7 on the StudentCD-ROM.

Risfts in Decision Making: A Delicste Balance Table9.1 illustrates

the two possibledecisions(do not reject /10or rejectH) that you can makein any
test.Youcanmakea correctdecisionor makeoneof two typesof errors.

TABLE 9.1 Actual Situation

HypothesisTesting StatisticalI)ecision /In True I1n False
and DecisionMaking
Do not rejectHo Correctdecision TypeII error
Confidence: (l - cr) P (TypeII error) = p
RejectHo TypeI error Correctdecision
P (TypeI error) : o Power: (l - p)

One way to reducethe probability of making a Type II error is by increasingthe

size.Large samplesgenerallypermit you to detectevenvery small differencesbetween
hypothesizedvaluesand the populationparameters.For a given level of o,,increasingthe
ple sizedecreasesB andthereforeincreases the powerofthe testto detectthatthe null

esiS,116,is false.However,thereis alwaysa limit to your resources,andthis affectsthe decision

as to how large a sampleyou can take.Thus, for a given samplesize, you must considerthe
trade-offsbetweenthe two possibletypesof errors.Becauseyou can directly control the risk of
TypeI error,you canreducethis risk by selectinga smallervaluefor o. For example,if the neg-
ativeconsequences associatedwith making a Type I error are substantial,you could selecta :
0.01 insteadof 0.05. However,when you decreasecx,you increaseB, so reducingthe risk of a
TypeI error resultsin an increasedrisk of a TypeII error.However,if you wish to reduceF, you
could selecta largervalue for cr.Therefore,if it is importantto try to avoid a TypeII error,you
canselecto of 0.05or 0.10insteadof 0.01.
In the Oxford Cerealsscenario,the risk of a TypeI error involvesconcludingthat the mean
fill amounthas changedfrom the hypothesized368 grams when it actually has not changed.
The risk of a TypeII error involvesconcludingthat the meanfill amounthasnot changedfrom
the hypothesized368 gramswhen it actuallyhaschanged.The choiceof reasonablevaluesfor
a and p dependson the costsinherentin eachtype of error. For example,if it is very costly to
changethe cereal-fill process,you would want to be very confident that a changeis needed
beforemaking any changes.In this case,the risk of a Type I error is more important,and you
would choosea small cr. However,if you want to be very certain of detectingchangesfrom a
meanof 368 grams,the risk of a Type II error is more important,and you would choosea
higher level of cr.

the Basics Applying the Concepts

9.1 You use the symbol l'1n for which hy- 9.13 In the U.S. legal system,a defendantis
pothesis? presumedinnocentuntil provenguilty. Consider
a null hypothesis,fls, that the defendantis inno-
9.2 You use the symbol H, for which hy-
cent,and an alternativehypothesis, Hr,that the defendant
is guilty. A jury has two possible decisions:Convict the
9.3 What symbol do you use for the chanceof defendant(that is, rejectthe null hypothesis)or do not con-
committinga TypeI error? vict the defendant(that is, do not reject the null hypothe-
sis).Explainthe meaningof the risks of committingeither
9.4 What symbol do you use for the chanceof
a TypeI or TypeII error in this example.
committinga TypeII error?
9.5 What does I - cr represent? 9.14 Supposethe defendantin Problem9.13 is pre-
sumedguilty until proveninnocent,as in someotherjudi-
cial systems.How do the null and alternativehypotheses
Whatis the relationshipof o to a TypeI error? differ from thosein Problem9.13?What arethe meanings
Whatis the relationshipof B to a TypeII error? of the risks of committing either a Type I or Type II error
How is power relatedto the probability of making a
II error? 9.15 The U.S. Food and Drug Administration(FDA) is
responsiblefor approving new drugs. Many consumer
9.9 Why is it possibleto reject the null hy-
groupsfeel that the approvalprocessis too easyand"there-
pothesiswhen it is true?
fore, too many drugsareapprovedthat arelater found to be
9.10 Why is it possibleto not rejectthe null unsafe.On the other hand,a numberof industry lobbyists
hypothesiswhen it is false? are pushing for a more lenient approvalprocessso that
pharmaceuticalcompaniescan get new drugs approved
11 For a given samplesize,if cr is reducedfrom 0.05 to
more easily and quickly (R. Sharpe,"FDA Tries to Find
l, whathappensto p?
Right Balance on Drug Approvals," The Wall Street
1 2 F o r H r :p : 1 0 0 , H r : t r t *l 0 0 , a n d f o r a s a m p l esoifz e Journal,April20, 1999,p.A24). Considera null hypothe-
whyis p largerifthe actualvalueofp is 90 than ifthe sis that a new,unapproveddrug is unsafeand an alternative
valueof u is 75? hypothesisthat a neq unapproveddrug is safe.
334 of Hvoothesis
CHAPTER NINE Fundamentals Testinc:One-Samplc

a. Explainthe risksof committinga TypeI or TypeII error. 9.17 The operations manager at a clothing factory
b. Which type of errorarethe consumergroupstryingto to detenninewhethera new machine is producinga
avoid?Explain. ular tvne of cloth accordins to the manufacturer's
c. Which type of error are the industry lobbyiststryrng to cations, which indicate that the cloth should havea
avoid'?Explain. breaking strength of 70 pounds. State the null andal
d. How would it be possibleto lower the chancesof both tive hvootheses.
Type I and Type Il errors'?
9.18 The managerof a paint supply storewantst0
mine whether the amount of oaint containedin 1

ffi 9 . 1 6 A s a r e s u l t o f c o r n p l a i n t sf r o m b o t h s t u -
dents and faculty about lateness,the registrar at a
T/-sEAlarge university wants to adjust the scheduled
cans purchased from a nationally known manufi
actually averagesI gallon. State the null and al
ffi class times to allow for adequate travel time
between classesand is ready to undertake a study. Until 9.19 The aualitvcontrolmanaserat a lisht bulb
noq the registrarhas believedthat there shouldbe 20 min- needs to determine whether the mean life of a large
utes betweenscheduledclasses.Statethe null hvpothesis. ment of light bulbs is equal to the specifiedvalueof
Hn, and the alternativehypothesis,H,. hours. State the null and alternativehvootheses. !


Now that you have been introduced to hypothesis-testingmethodology,recall that in theUsk
Statisticsscenarioon page 328, Oxford Cerealswants to determine whether the cereal
process is working properly (that is, whether the mean fill throughout the entire packag
processremains at the specified 368 grams, and no corrective action is needed).To evaluate
368-gram requirement, you take a random sample of 25 boxes, weigh each box, and thenev
uate the difference between the sample statistic and the hypothesizedpopulation paramete
comparing the mean weight (in grams) from the sample to the expectedmean of 368 gra
specified by the cornpany.The null and alternativehypothesesare

H6: P = 363

Hr: 'p,+ 368

When the standarddeviation,o, is known, you use the Z test if the populationis normallyd
tributed. If the population is not normally distributed, you can still use the Z test if the sam
size is large enough for the Central Limit Theorem to take effect (see Section 7.4). Equa
(9.1) defines the Z-test statistic for determining the difference between the sample mean,
and the populationmean,p, when the standarddeviation,o, is known.

Z- (e.1)
ln Equation (9.1)the numerator measureshow far (in an absolutesense)the obser
sample mean, X, is fiom the hypothesizedmean,lu. The denorninatoris the standarderro
the mean, so Z representsthe difference between X and p in standarderror units.

The firitical Value Appnoach to Hypothesis Testing

The observedvalue of the Z test statistic,Equation(9.1), is comparedto critical values.
critica) values are expressed as standard\zedZ va\ues \t\at rs, rn standard der,ratronum\s)
example, if you use a level of significance of 0.05, the size of the rejection region is (
Becausethe rejectionregionis divided into the two tails of the distribution(this is calleda
47'22.'t2 - / .'// J) :J.'z,z:.' 27.4.2i:)z:zt szzzt. ?11/-/,1.2-z;t.t .2//)2,2-?;z'.zzy',z . ) ,z'72'zf;),:':;,,23:-,.).:.2:t22.1
9.2: ZTestof Hypothesis
for theMean(o Known) 335

,dS each tail of the normal distribution results in a cumulative area of 0.025 below the lower criti-
ic- cal value and a cumulative areaof 0.975 below the upper critical value. According to the cumu-
fi- lative standardizednormal distribution table (Table E.2), the critical values that divide the
)an rejectionand nonrejectionregionsare -1.96 and +1.96. Figure 9.2 illustratesthat if the mean is
la- actually 368 grams, as Hn claims, the values of the test statistic Zhave a standardizednormal
distributioncenteredat Z :0 (which correspondsto an X value of 368 grams).Valuesof Z
greaterthan +1.96 or less than -1.96 indicate that X is so far from the hypothesizedp:368
that it is unlikely that such a value would occur if F1nwere true.
ve FIGURE 9.2
Testinga hypothesis
ry (oknown) at the 0.05
p- level
of significance

I i
R e g i o no f R e g i o no f
Nonrejection Rejection
rg I
rg Value
Therefore,the decisionrule is

R e j e c tH o l f Z > + 1 . 9 6
otherwise, do not reject Hn.

Supposethat the sampleof 25 cerealboxesindicatesa samplemean, X, of 312.5grams,and

the populationstandarddeviation,o, is assumedto be l5 grams.Using Equation(9.1) on page334,
- =
. = = Tl.Jv
\l n Jzs
B e c a u s et h e t e s t s t a t i s t i cZ - + 1 . 5 0 i s b e t w e e n- 1 . 9 6 a n d + 1 . 9 6 , y o u d o n o t r e j e c t H n ( s e e
Figure 9.3). You continue to believe that the mean fill amount is 368 grams. To take into
account the possibility ofa Type II error, you statethe conclusion as "there is insufficient evi-
dencethat the mean fill is different from 368 grams."

a hypothesis
the meancereal
weight(o known)at 0.05
of significance

i -1.96 0 + ' 1 . 5 0+ 1 . 9 6 I Z
Regionof R e g i o no f R e g i o no f
Rejection Nonrejection Rejection
336 CHAPTER NINE Fundamentalsof HypothesisTesting:One-SampleTests

Exhibit 9.1 providesa summaryof the critical value approachto hypothesistesting.

l. Statethe null hypothesis, Hr, andthe alternativehypothesis,11,.
2. Choosethe levelof significance,o, andthe samplesize,n. The levelof signifi
basedon the relativeimportanceof the risks of committingTypeI andTypeII
the problem.
J . Determinethe appropriate test statisticand samplingdistribution.
4. Determinethe critical valuesthat divide the rejectionand nonrejectionregions.
5 . Collect the sampledataand computethe valueof the test statistic.
6 . Make the statisticaldecisionand statethe manaserialconclusion.If the test
falls into the nonrejectionregion,you do not rejectthe null hypothesis,110.
statisticfalls into the rejectionregion,you rejectthe null hypothesis.The
conclusionis written in the contextof the real-worldoroblem.

methodof hypothesis
testingat OxfordCereals.
Step I Statethe null and alternativehypotheses. The null hypothesis,
lln, is always
statisticalterms,usingpopulationparameters. In testingwhetherthe meanfill is
grams,the null hypothesisstatesthat p equals368.The alternativehypothesis,ll
alsostatedin statisticalterms,usingpopulationparameters. Therefore,the
hypothesisstatesthat p is not equalto 368 grams.
Step 2 Choose the level of significance and the sample size.You choosethe level of si
cance,o, accordingto the relativeimportanceof the risks of committingTypeI
TypeII errorsin the problem.The smallerthe valueof c, the lessrisk thereis of
ing a Type I error. In this example,a Type I error is to concludethat the
meanis not 368 gramswhenit is 368 grams.Thus,you will takecorrectiveaction
the filling processeventhough the processis working properly.Here,c : 0.05
selected. Thesample,n, is 25.
Step3 Selectthe appropriatetest statistic.Becauseo is known from informationabout
filling process,you usethe normaldistributionandtheZ teststatistic.
Step 4 Determinethe rejectionregion.Critical valuesfor the appropriatetest statistic
selectedso that the rejectionregioncontainsatotal arcaof crwhenI1nis trueand
nonrejection region contains alotal area of I - cr when 11nis true. Becausec =
in the cerealexamDle.the critical valuesof the Z-teststatisticare-1 .96 and+1.
The rejectionregionis thereforeZ < -1.96 or Z > +1.96.The nonrejectionregion

Step 5 Collect the sample data and compute the value of the test statistic. In the
e x a m p l e . X : 3 7 2 . 5 . a n d t h e v a l u e o f t h e t e s t s t a t i s t i ci s Z : + 1 . 5 0 .

Step 6 Statethe statisticaldecision and the managerialconclusion.First, determi

whetherthe test statistichas fallen into the rejectionregion or the nonrejectio
region.For the cerealexample,Z: +1.50is in the regionof nonrejection becaus
-1.96 < Z-- +1.50< +1.96.Becausethe teststatisticfalls into the nonrejection region,
the statisticaldecisionis to not rejectthe null hypothesis,llo.The managerialconclu-
sion is that insufficient evidenceexiststo provethat the meanfill is differentfrom 368
grams.No correctiveactionon the filling processis needed.
9.2: ZTestof Hypothesisfor theMean(o Known) 337


You are the managerof a fast-foodrestaurant.You want to determinewhetherthe population
meanwaiting time to placean orderhaschangedin the pastmonth from its previouspopulation
meanvalueof 4.5 minutes.From pastexperience, you can assumethat the populationis nor-
mally distributedwith a populationstandarddeviationof 1.2minutes.Youselecta sampleof 25
ordersduring a one-hourperiod.The samplemeanis 5.1 minutes.Use the six-stepapproach
listed in Exhibit 9.I to determinewhetherthereis evidenceat the 0.05 level of significancethat
the populationmeanwaiting time to placean orderhaschangedin the pastmonth from its pre-
viouspopulationmeanvalueof 4.5 minutes.
Step 1 The null hypothesisis that the populationmeanhas not changedfrom its previous
valueof 4.5 minutes:
The alternativehypothesisis the oppositeof the null hypothesis.Becausethe null
hypothesisis thatthe populationmeanis 4.5 minutes,the alternativehypothesis
is that
the populationmeanis not 4.5 minutes:
H r : S t +4 . 5
Step2 You haveselecteda sampleof n : 25. The level of significanceis 0.05 (that is,
Step3 Becauseo is known,you usethe normaldistributionandthe Z teststatistic.
Step4 Becausec:0.05, the criticalvaluesof the Ztest statisticare-1.96 and +1.96.
The rejectionregion is Z < -1.96 or Z > +1.96. The nonrejectionregion is
Step5 Youcollectthe sampledataandcomputeX = S.t. UsingEquation(9.1)on page334,
you computethe teststatistic:
x -1t =#=2.50
Step 6 BecauseZ: 2.50> 1.96,you rejectthenull hypothesis.
Youconcludethatthereis evr-
dencethat the populationmeanwaiting time to placean orderhas changedfrom its
previousvalue of 4.5 minutes.The meanwaiting time for customersis longernow
thanit waslastmonth.

The pValue Approachto HypothesisTesting

Most modernsoftware,includingMicrosoft Excel,computesthep-valuewhen performinga

Thep-value is the probability of gettinga test statisticequalto or more extremethan the

sampleresult,given that the null hypothesis,F16,is true.

Thep-value, often referredto as the observedlevel of significance,is the smallestlevel at

which 110can be rejected.
The decisionrulesfor rejecting110in thep-valueapproachare
r If thep-value is greaterthan or equalto cx,do not rejectthe null hypothesis.
I If thep-valueis lessthanc, rejectthe null hypothesis.
NINE Fundamentals
of Hypothesis

Many peopleconfusetheserules,mistakenlybelievingthata highp-valueis groundsfor

tion.Youcanavoidthis confusionby rememberingthe followingmantra:

lf thep-value is low, then110must go.

To understandthe p-value approach,considerthe Oxford Cerealsscenario.You

whether the mean fill was equal to 368 grams. The test statisticresulted in a Z va\te of *
andyou did not rejectthe null hypothesisbecause+1.50was lessthanthe uppercritical
of +1.96andmorethanthe lowercriticalvalueof -1.96.
To usethep-value approachfor the two-tail test, yov find the probability of getting
statisticZ that is equalto or moreextremethan l.50 standarddeviationunits from the
a standardized normaldistribution.In otherwords,you needto computethe probability
valuegreaterthan +1.50,along with the probabilityof a Z value lessthan -1.50. Table
showsthattheprobabilityof a Z valuebelow-1.50 is 0.0668.Theprobabilityof a value
+1.50is 0.9332,andtheprobabilityof a valueabove+1.50is 1 - 0.9332:0.0668.
thep-valuefor thistwo-tailtestis 0.0668+ 0.0668:0.1336(seeFigure9.4).Thus,the
bility of a resultequalto or moreextremethanthe one observedis 0.1336.Because 0.1
greaterthancr : 0.05,you do not rejectthe null hypothesis.

Findinga p-value
for a two-tailtest

-1.50 0 +1.50 Z

In this example,the observedsamplemeanis 372.5 grams,4.5gramsabovethe

sizedvalue,and thep-valueis 0.1336.Thus,if the populationmeanis 368 grams,thereis
13.36%chancethat the samplemeandiffersfrom 368 gramsby morethan4.5 grams(thati
is2372.5 gramsor < 363.5grams).Therefore,while 312.5is abovethe hypothesized value
368,a resultas extremeas or moreextremethan372.5is not highlyunlikelywhenthe
tion meanis 368.
Unlessyou aredealingwith a teststatisticthat followsthe normaldistribution,computi
thep-valuecanbe very difficult. However,MicrosoftExcelroutinelycomputesthep-value
its hypothesis-testing procedures.Figure 9.5 displaysa Microsoft Excel worksheetfor
cereal-fillingexamplediscussed in this section.

resultsfor the cereal-fill

-(88 - 8tyBt1

-HORISII{V(I - Blilzl
-2' (1- xoRxsolsr(ABspr4))
-lF(817< 85, 'ReJoctihe null hypotheCr',
"0o not .c.rccllic null hlrpoihcria')
fortheMean(o Known) 339
9.2: ZTestofHypothesis

Exhibit 9.2providesa summaryof thep-valueapproachfor hypothesis



l. Statethe null hypothesis,Ho, andthe alternativehypothesis,,F1,.
2. Choosethe levelof significance,d, andthe samplesize,n. The levelof significanceis
basedon the relativeimportanceof the risks of committingTypeI andTypeII errorsin
the problem.
3. Determinethe appropriatetest statisticand samplingdistribution.
i 4. Collect the sampledata,computethe valueof the test statistic,and computethep-value.
I 5. Make the statisticaldecisionand statethe managerialconclusion.If thep-value is
Fr' greaterthan or equalto s, you do not rejectthe null hypothesis,.F10.
If thep-value is
Ia lessthan o(,you rejectthe null hypothesis.Rememberthe mantra:If thep-value is loq
then.I/omust go. The managerialconclusionis written in the contextof the real-world


You are the managerof a fast-foodrestaurant.You want to determinewhetherthe population
meanwaitingtime to placean orderhaschangedin the pastmonthfrom its previousvalueof
4.5 minutes.From pastexperience, you can assumethat the populationstandarddeviationis
1.2minutes.Youselecta sampleof 25 ordersduringa one-hourperiod.The samplemeanis 5.1
minutes.Use the five-stepapproachof Exhibit 9.2 aboveto determinewhetherthereis evi-
dencethat the populationmeanwaitingtime to placean orderhaschangedin the pastmonth
from its previouspopulationmeanvalueof 4.5 minutes.
Step 1 The null hypothesisis that the populationmeanhas not changedfrom its previous
valueof 4.5 minutes:

H6 trt: 4.5

The alternativehypothesisis the oppositeof the null hypothesis.Becausethe null

hypothesisis thatthepopulationmeanis 4.5 minutes,the alternativehypothesis
is that
the populationmeanis not 4.5 minutes:

H r : 1 t +4 . 5

Step2 Youhaveselecteda sampleof n : 25.Youchoosea 0.05levelof significance(thatis,

a = 0.05).
Step3 Selectthe appropriate teststatistic.Becauseo is known,you usethe normaldistribu-
tion and theZ teststatistic.
Step4 You collectthe dataandcomputeX: S.l. UsingEquation(9.1)on page334,you
computethe teststatisticas follows:

X - t- -
5.1-4.5 _)50
o 1.2
1n ]E
To find the probability of gettinga test statistic Z that is equalto or more extremethan
2.50 standarddeviationunits from the centerof a standardized normal distribution,
you computethe probabilityof a Z valuegreaterthan2.50 alongwith the probability
340 CHAPTER NINE Fundamentalsof HypothesisTesting:One-SampleTests

of a Z valuelessthan-2.50. FromTable8..2,theprobabilityof a Z valuebelow

is 0.0062.Theprobabilityof a valuebelow+2.50is 0.9938.Therefore, the
of a valueabove+2.50is 1 - 0.9938: 0.0062.Thus.the p-valuefor this
is 0.0062+ 0.0062:0.0124.
Step5 Becausethep-value: 0.0124< cx: 0.05,you rejectthe null hypothesis.
that there is evidencethat the populationmeanwaiting time to placean
changedfrom its previouspopulationmeanvalueof 4.5 minutes.Themean
time for customersis longernow thanit waslastmonth.

A Connection Between Confidence Interval Estimation

and Hypothesis Testing
This chapterand Chapter8 discussthe two major componentsof statisticalinference:
denceintervalestimationand hypothesistesting.Althoughthey are basedon the same
concepts,they areusedfor differentpurposes.In Chapter8, confidenceintervalswere
estimateparameters.In this chapter,hypothesistestingis usedfor making decisions
specifiedvaluesof populationparameters. Hypothesistestsareusedwhentryingto
a parameteris lessthan,morethan,or not equalto a specifiedvalue.Properinterpretation
confidenceinterval,however,canalsoindicatewhethera parameteris lessthan,more
not equal to a specified value. For example, in this section, you testedwhether the
meanfill amountwasdifferentfrom 368 gramsby usingEquation(9.1)on page334:

X -p,

lnsteadof testingthe null hypothesisthatp: 368grams,you canreachthe sameconclusi

constructinga confidence interval valueof p:368 is
estimateof p. If the hypothesized
tainedwithin the interval,you do not rejectthe null hypothesisbecause368 wouldnotbe
sideredan unusualvalue.However,if thehypothesized valuedoesnot fall into theinterval,
rejectthe null hypothesis because"p : 368 grams"is thenconsidered an unusualvalue,
Equation(8.1) on page287 andthe followingdata:
n = 25. X = 372.5grams.
o = 15grams

for a confidencelevelof 95oh(corresponding

to a 0.05levelof significance-that

x t z -T
\1 n

3 7 2 . 5 +5 . 8 8

so that


Becausethe intervalincludesthe hypothesized valueof 368 grams,you do not rejectthenu

hypothesis.There is insufficient evidencethat the mean fill amountover the entire fillin
processis not 368 grams.Youreachedthe samedecisionby usingtwo-tailhypothesis testing
9.2: ZTestof Hypothesisfor the Mean(o Known) 341

the Basics containedin l-gallon canspurchasedfrom a nationally

known manufactureris actually 1 gallon. You know from
9.20 If you usea 0.05 level of significancein a the manufacturer'sspecificationsthat the standarddevia-
(two-tail)hypothesistest,what will you decideif tion of the amountof paint is 0.02gallon.You selecta ran-
thecomputedvalueof the test statisticZ is +2.21? dom sampleof 50 cans,and the meanamountof paintper
9.21 If you usea 0.l0level of significance in a l-galloncanis 0.995gallon.
(two-tail)hypothesistest,what is your decision a. Is there evidencethat the populationmean amountis
rulefor rejectinga null hypothesisthat the popu- differentfrom 1.0gallon(useo: 0.01)?
meanis 500if you usethe Z test? b. Computethep-value and interpretits meaning.
c. Constructa 99ohconfidenceinterval estimateof the
9,22 lf youusea 0.01level of significancein a populationmeanamountof paint.
(two{ail) hypothesistest, what is your decision d. Comparethe resultsof (a) and (c). What conclusionsdo
rulefor rejecting110:yt: 12.5if you usetheZ test? you reach?
9.23 What is your decisionin Problem9.22 if
9.30 The quality control managerat a light bulb factory
the computedvalue of the test statistic Z is
needsto determinewhetherthe mean life of a large ship-
ment of light bulbs is equalto 375 hours.The population
9.24 Supposethat in a two-tail hypothesistest, standarddeviationis 100 hours.A randomsampleof 64
you computethe value of the test statisticZ as light bulbsindicatesa samplemeanlife of 350 hours.
+2.00.Whatis thep-value? a. At the 0.05 level of significance,is thereevidencethat
the populationmeanlife is different from 375 hours?
9.25 ln Problem9.24, what is your statistical
b. Computethep-value and interpretits meaning.
decisionifyou testthe null hypothesis
at the 0.l0
c. Constructa 95o/oconfidenceinterval estimateof the
populationmeanlife of the light bulbs.
9.26 Supposethat in a two-tail hypothesistest, d. Comparethe resultsof (a) and(c). What conclusions do
you computethe value of the test statisticZ as you reach?
-1.38.Whatis thep-value?
9.31 The inspectiondivision of the Lee CountyWeights
9.27 In Problem9.26, what is your statistical and MeasuresDepartmentis interestedin determining
decision if you testthenull hypothesis
at the 0.01 whetherthe properamountof soft drink hasbeenplacedin
levelof significance? 2-literbottlesat the localbottlingplantof a largenationally
known soft-drink company. The bottling plant has
the Concepts informedthe inspectiondivision that the standarddeviation
9.28 The operationsmanagerat a clothing fac- for 2-liter bottlesis 0.05 liter. A randomsampleof 100
tory needsto determinewhethera new machine 2-liter bottles selectedfrom this bottling plant indicatesa
is producinga particulartype ofcloth according samplemeanof 1.99liters.
manufacturer's specifications,which indicatethat a. At the 0.05 level of significance,is thereevidencethat
clothshouldhave a mean breaking strengthof 70 the populationmeanamountin the bottlesis different
anda standarddeviationof 3.5 pounds.A sample from 2.0 liters?
piecesof cloth revealsa sample mean breaking b. Computethep-value and interpretits meaning.
of69.1pounds. c. Constructa 95ohconfidenceinterval estimateof the
thereevidencethat the machine is not meeting populationmeanamountin the bottles.
manufacturer's specificationsfor mean breaking d. Comparethe resultsof (a) and (c). What conclusions do
h?(Usea 0.05levelof significance.) you reach?
thep-valueandinterpretits meaning.
9.32 A manufacturer of saladdressingsusesmachinesto
is your answerin (a) if the standarddeviation is
dispenseliquid ingredientsinto bottlesthat movealonga
filling line. The machinethat dispenses dressingsis work-
Whatis youranswerin (a) if the samplemeanis 69
ing properlywhen the meanamountdispensedis 8 ounces.
andthe standarddeviationis 3.5 pounds?
The populationstandarddeviationof the amountdispensed
9.29 The managerof a paint supply storewants is 0.15 ounce.A sampleof 50 bottlesis selectedperiodi-
to determinewhetherthe mean amount of paint cally, and the filling line is stoppedif thereis evidencethat
342 CHAPTERNINE Fundamentals
of Hypothesis

the mean amount dispensedis different from 8 ounces. and earninginterest.Supposethat at a particular
Supposethat the meanamountdispensedin a particular the populationmean amountof money withdrawn
sampleof 50 bottlesis 7.983ounces. AIMs per customertransactionover the weekendis
a. Is thereevidencethat the populationmeanamountis dif- with a populationstandarddeviationof $30.
ferentfrom 8 ounces?(Usea 0.05levelof significance.) a. If a randomsampleof 36 customertransactions
b. Computethep-valueandinterpretits meaning. catesthat the samplemeanwithdrawal amountis
c. What is your answerin (a) if the standarddeviationis is there evidenceto believethat the population
0.05ounce? withdrawalamountis no longer$160?(Usea 0.05
d. What is your answerin (a) if the samplemeanis 7.952 of significance.)
ouncesandthe standarddeviationis 0.15ounce? b. Computethep-valueand interpretits meaning.
9.33 ATMs must be stockedwith enoughcashto satisfy c. What is your answerin (b) if you use a 0.01
customersmakingwithdrawalsoveran entireweekend.But significance?
if too much cashis unnecessarilykept in the ATMs, the d. What is your answerin (b) if the standarddevi
bank is forgoing the opportunityof investingthe money $24(usecr: 0.05)?

In Section9.2, hypothesis-testing methodologyhasbeenusedto examinethe question
whetherthe populationmeanamountof cerealfilled is 368 grams.The alternative
(Ht: p * 368) containstwo possibilities:Eitherthe meanis lessthan368 grams,or the
morethan 368 grams.For this reason,the rejectionregionis dividedinto the two tailsof
samplingdistributionof the mean.
In many situations,however,the alternativehypothesisfocuseson a particular
one such situationoccursin the following application:A companythat makes
cheeseis interested in determiningwhethersomesuppliersthatprovidemilk for theprocessi
operationareaddingwaterto theirmilk to increasethe amountsuppliedto theprocessing
ation.It is knownthatexcesswaterreducesthe freezingpoint of themilk. The freezingpoint
naturalmilk is normallydistributed,with a meanof -0.545' Celsius(C). The standard
tion of the freezingtemperature of naturalmilk is known to be 0.008"C.Becausethe c
companyis only interestedin determiningwhetherthe freezingpoint of the milk is less
what would be expectedfrom naturalmilk, the entirerejectionregionis locatedin the lower
of the distribution.

The CriticalValueApproach
Supposeyou wish to determinewhetherthe meanfreezingpoint of milk is lessthan-0.5450.
To performthis one-tailhypothesistest,you use the six-stepmethodlistedin Exhibit 9.1on
Step1 Ho: It>--0.545"C.
Hi trt<-0.545"C.

The alternativehypothesiscontainsthe statementyou are trying to prove.If the con-

clusionof the testis "rejectHo," thereis statisticalproof that the meanfreezingpoint
of the milk is lessthanthe naturalfreezingpoint of -0.545'C. If the conclusionof tne
test is "do not rejectlln," then thereis insufficientevidenceto provethat the mean
freezingpoint is lessthanthe naturalfreezingpointof -0.545"C.
Step2 Youhaveselecteda samplesizeof n: 25.Youdecideto useo,: 0.05.
Step3 Becauseo is known,you usethe normaldistributionandthe Z-teststatistic.
Step4 The rejectionregionis entirelycontainedin the lowertail of the samplingdistribution
of the meanbecauseyou want to reject110only whenthe samplemeanis significantly
9 . 3 : O n e - T a i l T e s t s3 4 3

lessthan-0.545'C. When the entirerejectionregionis containedin one tail of the sam-

pling distributionof the test statistic,the test is called a one-tail or directional test.
When the alternativehypothesisincludesthe /e.r.ithan sign.the critical valueof Z must
be negative.As shown in Table9.2 and Figure9.6, becausethc entirerejcctionregiolris
L- in the lowertail of the standardized normal distributionand containsan areaof 0.05.the
) c r i t i c a lv a l u co f t h e Z t e s t s t a t i s t i ci s - 1 . 6 4 5 , h a l l w a yb e t w e e n- 1 . 6 4 a n d - 1 . 6 5 .
n T l r ed e c i s i o nr u l e i s
t o i fZ < - 1 . 6 4 5 ;
R e j e cH
otherwise, do not rejectH,,.

T A B L9E. 2 .02 .03 [b4 ^ot .06 .07 .08 .09

F i n d i nt g
he Critical : : : :
Value of the Z Test 8 . 0 3 5 9 n ? <| 03 .0314 .0301
Statistic from the 7 .0446 .0436 .0392 .037s
S t a n d a r d i zN
eodr m a l .0485 .0465
Distribution for a One-
TailTest with o( = 0.05 S t ' r r r t c :f . t t r t t , t t l l f u t r t tT , r l r l r ' E . )
Onetailtest of
e hypothesis for a mean
( ok n o w na) t t h e 0 . 0 5
t. l e v eol f s i g n i f i c a n c e

:- 'i'-1.645 0
rf R e g i o no f R e g i o no f
Rejection Nonrejection
il Step5 Youselecta sampleof 25 containers of rrrilkand find thatthe sarnplerreanfreezing
p o i n te q u a l-s0 . 5 5 0 " CU. s i n gr r: 2 5 . X : - 0 . 5 5 0 " Co. - 0 . 0 0 8 ' Ca, n dE q u a t i o(n9 . 1)
on page334,

- F -p - ( - 0.s4s)
- 0.ss0 - _1 t?{
o 0.008
1tl ,E
Step 6 BecauseZ : -3.125 < - I .645.you rc'jectthe null hypothesis(seeFigure9.6).You con-
clude that the rneanfreezingpoint of the rrilk provided is below -0.545'C. The com-
pany should pursue an irrvestigationof thc milk supplier becausethe mean freezing
point is significantlybelow what is expectedto occur by chance.

The p-Value l\pproach

Use the five stepslisted in Exhibit 9.2 on page339 to illustratethe test from the precedingpage
using the 7r-valueapproach.

Steps l-3 Thcse stepsare the sarneas in the critical value approach.

Step 4 Z - -3.125 (seestep5 ofthe critical value approach).Becausethe alternativehypoth-

csis indicatesa re.jectiorr
regionentirely in the lollet'tatl of the san-rpling
NrNE Fundamentalsof HypothesisTesting:One-SampleTests

theZ teststatistic,to computethep-value,youneedto find theprobabilitythat

valuewill be/essthantheteststatisticof -3.125.FromTableE.2,theprobability
theZ valuewill belessthan -3.125 is 0.0009(seeFigures9.7and9.8).

Determining the
p-valuefor a


resultsfor the milk

See Section E9.1 to create -(88 _B4yB11
-lF{816 < Bli, ?eJea tha null hypothrdr',
"llo DotroJ.c{the null hnothcclrJ

Step 5 Thep-valueof 0.0009is lessthancr: 0.05.Youreject.Flo. Youconcludethatthe

freezingpoint of themilk providedis lessthan-0.545oC.The companyshould
an investigationof the milk supplierbecausethe mean freezingpoint is signifi
lessthanwhat is expectedto occurby chance.

A companythat manufactureschocolatebarsis particularlyconcernedthat the meanweight
a chocolatebar not be greaterthan6.03ounces.Pastexperience allowsyou to assumethat
standarddeviationis 0.02 ounces.A sampleof 50 chocolatebarsis selected,and the
meanis 6.034 ounces.Using the o : 0.01 level of significance,is thereevidencethat the
ulationmeanweightof the chocolatebarsis greaterthan6.03ounces?
SOLUTION Usingthe criticalvalueapproach,
Step I l1o:p ( 6.03
11,:trr> 6.03

Step 2 Youhaveselecteda samplesizeof n: 50.Youdecideto useo: 0.01.

Step3 Becauseo is known,you usethe normaldistributionandthe Z teststatistic.
Step4 The rejectionregionis entirelycontainedin theuppertail of the samplingdistribu
of the meanbecauseyou want to rejectlln only whenthe samplemeanis signifi
greaterthan 6.03 ounces.Becausethe entirerejectionregion is in the uppertail of
standardized normaldistributionandcontainsanareaof 0.01.the criticalvalueof
Ztest statisticis 2.33.
9.3: One-TailTests 345

The decisionrule is

RejectHoif Z> 2.33;

otherwise,do not reject.Flo.

Step 5 You selecta sampleof 50 chocolatebars,andthe samplemeanweight is 6.034ounces.

Usingz : 50, X : 6.034,o : 0.02,andEquation(9.1) on page334,

X -V =w#&=r'4r4
1n So
Step6 BecauseZ:1.414 <2.33, you do not rejectthe null hypothesis. Thereis insufficient
evidenceto concludethat the populationmeanweight is greaterthan 6.03 ounces.

To perform one-tail testsof hypotheses,you must properly formulateHoandFl,. A sum-

mary of the null and alternativehypothesesfor one-tailtestsis as follows:
1. The null hypothesis,I1s, representsthe statusquo or the currentbelief in a situation.
2. The alternativehypothesis,F11,is the oppositeof the null hypothesisand representsa
researchclaim or specific inferenceyou would like to prove.
3. Ifyourejectthe null hypothesis,youhave statisticalproofthatthe alternativehypothesisis
4. Ifyou do not reject the null hypothesis,then you have failed to prove the alternative
hypothesis.The failure to prove the alternativehypothesis,however,doesnot meanthat
you haveproventhe null hypothesis.
5. The null hypothesis(11e)alwaysrefers to a specified value of thepopulation parameter
(suchas p), not to a samplestatistic (suchas X ).
6. The statementof the null hypothesisalwayscontainsan equalsign regardingthe specified
valueof the parameter(for example,Ho: IL> -0.545'C).
7. The statementof the alternativehypothesisnever contains an equal sign regardingthe
specifiedvalueof the parameter(for example,Hri F < -0.545"C).

the Basics 9.38 Supposethat in a one-tail hypothesistest

where you reject Ho only in the upper tail, you
9.34 In a one-tail hypothesistest where you computethevalueof theteststatisticZ tobe +2.00.
rejectI1o only in the upper tail, what is the criti- What is thep-value?
cal value of the Z test statisticat the 0.01 level of
,| 9.39 In Problem9.38, what is your statistical
decisionif you testthe null hypothesisat the 0.05
9.35 In Problem9.34,what is your statistical
level of significance?
decisionif the computedvalueof the Ztest statis-
tic is 2.39? 9.40 Supposethat in a one-tail hypothesistest whereyou
reject Ho only in the lower tail, you compute the value of
9.36 In a one-tail hypothesistest where you
the test statisticZ as -1.38. What is thep-value?
rejectHo only in the lower tail, what is the criti-
cal valueof theZtest statisticat the 0.01level of 9.41 In Problem 9.40, what is your statisticaldecisionif
icance? you testthe null hypothesisat the 0.0I level of significance?
9.37 ln Problem9.36, what is your statistical 9.42 In a one-tailhypothesistestwhereyou rejectflo only
decisionif the computedvalueof the Ztest statis- in the lower tail, you computethe value of the test statistic
tic is -1.15? Z as+1.38.What is the p-value?
346 CHAPTER NINE Fundamentalsof HypothesisTesting:One-SampleTests

total econornic spending aff-ected by children in the

9-43 trr Prolrlenr 9.42' what is the statistical dccision ii you
t c s t t h e n u l l h y p o t h c s i s a r tt h c 0 . O t l e v e l o f s i g n i f i c a n c e ' / States is $290 billion. It is estimated that by age 10, a
makes an average of tnore than five trips a weck to a
Applying the Concepts (M. E. Goldberg, G. J. Gorn, L. A. Peracchio,
G. Bamossy,"Understanding MaterialismAmong
9.44 The Glen Valley SteelCompanymanufac-
Joumalof Consumer Psychology,2003, l3(3) pp.2
turessteelbars.Ifthe productionprocessis work-
Supposethat you want to provethat childrenin your
ing properly,it turns out steelbarsthat are nor-
averagemore than five trips a week to a store.Let p
mally distributedwith meanlengthof at least2.8 feet,with
sentthe populationmeannumberof timeschildrenin
a standarddeviationof 0.20foot (asdeterminedfrom engi-
city maketrips to a store.
neering specificationson the production equipment
a. Statethe null andalternativehypotheses.
involved).Longer steelbars can be used or altered,but
b. Explainthe meaningof the TypeI andTypeII
shorterbarsmust be scrapped. You selecta sampleof 25
thecontextofthis scenario.
bars,andthemeanlengthis 2.73 feet.Do you needto adjust
c. Supposethat you carry out a similar studyin thecity
the productionequipment?
which you live. Basedon paststudies,you assume
a. If you testthe null hypothesisat the 0.05levelof signif-
the standarddeviation of the number of trios to the
icance,what decisiondo you make using the critical
is 1.6.Youtakea sampleof 100childrenandfind
valueapproachto hypothesis testing?
the meannumberof trips to the storeis 5.47.At
b. Ifyou testthe null hypothesis at the 0.05levelofsignif-
0.01 level of significance,is thereevidencethat
icance,what decisiondo you makeusingthep-value
populationmeannumberof trips to the storeis
approachto hypothesis testing?
than 5 per week?
c. Interpretthe meaningof thep-valuein this problem.
d. Interpretthe meaningof thep-valuein (c).
d. Compareyour conclusionsin (a) and(b).
9.47 The waiting time to placean orderat a branch
9.45 You are the managerof a restaurantthat delivers
fast-food chain durine the lunch hour has had a
pizza to collegedormitory rooms.You havejust changed
meanof 3.55minutes,with a populationstandard
your deliveryprocessin an effort to reducethe meantime
of l.l minutes.Recently.in an effort to reducethewaiti
betweenthe orderandcompletionof deliveryfrom the cur-
time, the branchhasexperimented with a systemin whi
rent25minutes.Frompastexperience, you canassumethat
thereis a singlewaitingline.A sampleof 100
thepopulationstandarddeviationis 6 minutes.A sampleof
during a recentlunch hour was selected,and their
36 ordersusing the new deliveryprocessyields a sample
waitingtime to placean orderwas 3.18minutes.A
meanof 22.4minutes.
that the population standarddeviation of the waiting ti
a. Using the six-stepcritical value approach,at the 0.05
hasnot chansedfrom 1.1minutes.
level of significance,is thereevidencethat the popula-
a. At the 0.05levelof significance,usingthe critical
tion meandeliverytime hasbeenreducedbelowthepre-
approachto hypothesis testing,is thereevidencethat
viouspopulationmeanvalueof 25 minutes?
populationmeanwaiting time to placean orderis
b. At the 0.05 level of significance,use the five-step
p-value approach.
b. At the 0.05 level of significance,using thep-
c. Interpretthe meaningof thep-valuein (b).
approachto hypothesis testing,is thereevidencethat
d. Compareyour conclusionsin (a) and(b).
populationmeanwaiting time to placean orderis
9.46 Childrenin the United Statesaccountdirectlyfor $36 than3.55minutes?
billion in salesannually.When their indirect influenceover c. Interpretthe meaningof thep-valuein this problem.
productdecisionsfrom stereosto vacationsis considered, the d. Compareyour conclusionsin (a) and(b).


In most hypothesis-testing situationsconcerningthe populationmeanF, you do not know
populationstandarddeviation,o. Instead,you use the samplestandarddeviation,S. If you
assumethat the populationis normallydistributed" the samplingdistributionof the meanfol-
lows a r distributionwith r - I degreesof freedom.If the populationis not normallydistrib-
uted"you canstill usethe / testif the samplesizeis largeenoughfor the CentralLimit Theorem
to takeeffect(seeSection7.4).Equation(9.2) definestheteststatistic/ for determiningthedif-
ferencebetweenthe samplemean.X, and the populationmean,p, whenthe samplestandard
deviation.,S.is used.
9.4: tTest of Hypothesisfbr thc Mean (o Unknown) 347

re Y -rt


8). G
ity where the test statistic t follows a I distribution having n - I degreesof freedom.
To illustratethe use of this 1test, return to the Using Statisticssccnarioconcerningthe
Saxon Home lmprovementCompany on page 284. Over the past five years,the mean amount
per salesinvoice is S120.As an accountantfor the company,you need to inform the finance
departmentif this amount changes.In other words. the hypothesistest is r-rsed to try to prove
that the mean amountper salesinvoice is increasingor decreasing.
.ore The Critical Value Approach
To perform this two-tail hypothesistest, you usethe six-steprnethodlistedin Exhibit9.1 on
p a g e3 3 6 .
ater Step I H , , :p - $ 1 2 0

The alternativehypothesiscontainsthe stater.nent you are trying to prove. If the null

ofa hypothesis is rejected then there is statistical proof that the populationmean amount
ttion per salesinvoice is no longer S120. If the statisticalconclusionis "do not reject H,,."
ltion t h e n y o u w i l l c o n c l u d et h a t t h e r e i s i n s u f f i c i e n t e v i d e n c et o p r o v e t h a t t h e m e a n
iting amoLlntdiffers from the long-term rneanof $ 120.
Step 2 You have selecteda sampleof n - 12.You decideto use o - 0.05.
nean Step 3 Becauseo is unknown, you use the t distributionand the I test statisticfor this exam-
iume ple. You rnustassumetlratthe populationof salesinvoicesis nonnally distributed.Thrs
time assurnptionis discussedon page 346.
S t e p 4 F o r a g i v e n s a m p l e s i z e . n . t h e t e s t s t a t i s t i c l f o l l o w s a l d i s t r i b u t i o n w i t hl dne- g r e e s
,alue of l'rcedom.The critical valuesof the r distributionwith l2 - I : ll degreesof free-
t the dom are found in Table E.3, as illustratedin Table 9.3 and Figure 9.9. The alternative
less h y p o t h e s i sH . r . V + $ 1 2 0 i s t w o - t a i l e d .T h u s , t h e a r e a i n t h e r e j e c t i o nr e g i o no f t h e
I d i s t r i b u t i o n ' sl e f t ( l o w e r ) t a i l i s 0 . 0 2 5 , a n d t h e a r e a i n t h e r e j e c t i o nr e g i o n o f t h e
alue I d i s t r i b u t i o n ' rsi g h t ( u p p e r )t a i l i s a l s o0 . 0 2 5 .
t the
T A B L9
E. 3 Upper-TailAreas
D e t e r m i n i nt hge Degreesof Freedom )< .10 .05 .025
C r i t i c a l V a l fureo m t h e
tTablefor an Area of I r .0000 3 . 0 7 7 7 6 . 31 3 8 062 31.8207 63.6s14
0 . 0 2 i5n E a c hT a i lw i t h 2 0.8165 1.8856 2.9200 027 6.9646 9.9248
1 Degreesof Freedom 3 0.7649 1.6377 2.3534 824 4.5407 5.8409
0.1407 1.s332 2 .l 3 l 8 164 3.7469 4.6041
5 0.7267 1.4759 2.01s0 106 3.3649 4.0322
z the b 0 . 1r 76 r.4398 r.9432 469 3.t421 3.7074
you 7 0 . 7 1I I 1.4149 1.8946 2.9980 3.4995
fol- 8 0.7064 1.3968 1.8595 2.8965 3.3s54
trib- 9 0.7027 1.3830 1 . 8 3r3 22 2.8214 3.2498
)rem 10 0.6998 1.3722 1.8125 81 2.7638 3.t693
dif- 2.7181 3.1058
Sour<e. E.ttruttt,tl li ont ThhlL:1,.-l
318 CHAPTER NINE Fundamenralsof HypothesisTesting:one-Sa'.rpreTests

aboutthe mean
(o unknown)at the
0.05levelof significance
with 11 degreesof

-2.2010 '0
| +2.2010 | t.,

of Regionof R e g i o no f
Rejection Nonrejection Rejection
Critical Critical
Value Value

Fromther tableasgivenin Table8.3,a portionof whichis shownin Table9.3,

criticalvaluesare+2.2010.Thedecisionrule is

RejectHoif t. -trr: _2.2010

orif l> trr-+2.2010;
otherwise,do not rejectHn.

Step5 The datain the file FilFlllttltl arethe amounts(in dollars)in a random
108.98 152.22 I I I .45 110.59 t2t .46 107.2o
9 3 . 3 2 9 t . 9 7 I I L 5 6 7 s . 7 | 1 2 8 . 5 8 l 3 s . II

UsingEquations (3.1)and(3.10)on pages97 and107,or MicrosoftExcel,asshown

in Figure9.10,

X=i=t =$112.85

FromEquation(9.2) on page347,

x -tt 1 1 2 . 8-5 1 2 0
= -1.1908
.s 20.80
1n E

for the one-samole
t test of salesinvoices

-86 -1
See Section E9.2 to create -6n , ar;/Brt
-lF(818< &i, -Rejectrte n{lt hirpothesb-,
not roJecf $. null hypoth€b"l
fortheMean(oUnknown) 349

Step 6 Because-2.2010 < l: -1.1908 < 2.2010,you do not rejectF1o. You haveinsufficient
evidence conclude that the mean amount per salesinvoice differs from $120.You
shouldinform the financedepartmentthat the audit suggeststhat the meanamountper
invoicehasnot chansed.

The pValue Approach

Steps 1-3 Thesestepsare the sameas in the critical value approach.
Step4 From the Microsoft Excel worksheetof Figure9.10, t: -1.1908 and thep-value:
0.2588(seestep5 ofthe criticalvalueapproach).
Step 5 The Microsoft Excel resultsin Figure 9.10 give the p-value for this two-tail test as
0.2588.Becausethep-valueof 0.2588is greaterthancr : 0.05,you do not reject110.
The dataprovideinsufficientevidenceto concludethat the meanamountper sales
invoice differs from $120.You should inform the finance departmentthat the audit
suggeststhat the meanamountper invoicehasnot changed.Thep-valueindicatesthat
if the null hypothesisis true, the probability that a sampleof 12 invoicescould havea
monthlymeanthat differsby $7.15or more from the stated$120 is 0.2588.In other
words,if the meanamountper salesinvoiceis truly $120,thenthereis a25.88%o
chanceof observinga samplemeanbelow$112.85or above$127.15.
In the precedingexample,it is incorrectto statethat thereis a 25.88%chancethatthe null
hypothesisis true. This misinterpretationof thep-value is sometimesusedby thosenot prop-
erly trained in statistics.Rememberthat thep-value is a conditionalprobabiliry calculatedby
assumingthat the null hypothesisis true. In general,it is properto statethe following:
If the null hypothesisis true, thereis a (p-value)*1000/o
chanceof observinga sample
resultat leastas contradictoryto the null hypothesisasthe resultobserved.

Youusethe one-sampler testwhenthe populationstandarddeviation,o, is not knownandis esti-
a large sample size matedusingthe samplestandarddeviation,l,S.To usethe one-sample/ test,the dataareassumed
available,S estimates o to representa randomsamplefrom a populationthat is normally distributed.In practice,aslong
enough that there asthe samplesizeis not very small andthe populationis not very skewed,the I distributionpro-
littledifference betwe en videsa good approximationto the samplingdistributionof the meanwheno is unknown.
t andZ distributions. Thereare severalwaysto evaluatethe normality assumptionnecessaryfor using the / test.
You can observehow closely the samplestatisticsmatch the normal distribution'stheoretical
properties.You can also use a histogram,stem-and-leafdisplay,box-and-whiskerplot, or nor-
mal probability plot. For detailson evaluatingnormaliry seeSection6.3 on page234.
Figure9.11 presentsdescriptivestatisticsgeneratedby MicrosoftExcel.Figure9.12 is a
MicrosoftExcelbox-and-whiskerplot. Figure9.13is a MicrosoftExcelnormalprobabilityplot.

statisticsfor fl2.qrfi
invoice data 6.txls:f
fode #vA
Standard Dcvladon 20.73799
Varlancs f32.t565
Section E3.1 to create
Xurtoglr 0.1727|a
Skormoer 0.1rnn
Range 70-51
tlnlmom 75.71
Xnxlmum $7J,.
Sum 1354.21
Count 12
Largcctfl| tna,
Smallodfl) T5.fI
350 CHAPTER NINE Fundamentalsof Hypothesis Testing: One-SampleTests

Box.and4llhiskerPlot of InvoiceAmount
and-whiskerplot for the

See Section E3.4 to create



Normat Probability Plot of lnvoice Amount

plot for the

See Section E6.2 to create 5ro

Becausethe mean is very close to the median,the points on the normal probabilit
appearto be increasingapproximatelyin a straightline, and the box-and-whiskerplot ap
approximatelysymmetrical.You can assumethat the populationof salesinvoicesis ap
mately normally distributed.The normality assumptionis valid, and thereforethe aud
The / test is a robust test. It doesnot lose powerif the shapeof the populationde
somewhatfrom a normal distribution,particularlywhen the samplesizeis largeenou
enablethe test statisticI to be influencedby the Central Limit Theorem(seeSectio
However,you can makeerroneousconclusionsand can lose statisticalpowerif you ut
/ test incorrectly.If the samplesize,n, is small (that is, lessthan 30) and you cannot(
make the assumptionthat the underlying population is at least approximatelynor
distributed,othernonparametrictesting proceduresare more appropriate(seerefer
9.4; tTestof Hypothesisfor theMean(o Unknown) 351

the Basics 0.10 level of significance,is there evidencethat the mean

shoppingtime at the local supermarketis differentfrom the
9.48 If, in a sampleof n : 16 selectedfrom a claimed valueof 22 minutes?
normalpopulation, X : 56 and .9: 12, what is
valueofthe t-teststatisticifyou are testing 9.56 You are the managerof a restaurantfor a
is I1o:p: 50? fast-food franchise.Last month, the mean wait-
ing time at the drive-throughwindow, as mea-
9.48, how many degreesof freedomare sured from the time a customerplaces an order until the
one-sampleI test? time the customerreceivesthe order,was 3.7 minutes.The
9.48 and9.49. what are the critical val- franchisehelpedyou institutea new processintendedto
thelevelofsignificance, cr,is 0.05 and the alter- reducewaiting time. You selecta random sampleof 64
s,11r, orders.The samplemean waiting time is 3.57 minutes,
with a samplestandarddeviationof 0.8 minute.At the 0.05
level of significance,is there evidencethat the population
meanwaiting time is now lessthan 3.7 minutes?
Problems 9.48,9,49,and9.50,whatis your statis-
ionif the alternativehypothesis,F/,, is 9.57 A manufacturerof chocolatecandiesusesmachines
to packagecandiesas they move along a filling line.
Although the packagesare labeledas 8 ounces,the com-
panywantsthe packagesto contain8.17ouncesso that vir-
in a sampleof n: 16 selectedfrom a left-skewed tually none of the packagescontain lessthan 8 ounces.A
X = 65 and^S: 21, wouldyou usethe / testto sampleof 50 packagesis selectedperiodically,and the
hypothesisHoi lr:60? Discuss. packagingprocessis stoppedifthere is evidencethat the
in a sampleof n: 160selectedfrom a left-skewed mean amount packagedis different from 8.17 ounces.
X = 65 and^S: 21, wouldyou usethe I testto Supposethat in a particular sampleof 50 packages,the
hypothesis Ho: lt: 60?Discuss. mean amount dispensedis 8.159 ounces,with a sample
standarddeviationof0.05l ounce.
the Concepts a. Is there evidencethat the populationmean amount
is different from 8.17 ounces?(Use a 0.05 level of
paymentof medical claims can add to the cost significance.)
care.An article (M. Freudenheim."The CheckIs b. Determinethep-value and interpretits meaning.
Mail," TheNew YorkTimes,May 25,2006, pp.
reportedthat the mean time from the date of ser- 9.58 The datain the file@@contains prices(in
dateof paymentfor one insurancecompanywas dollars) for two tickets, with online servicecharges,large
duringa recentperiod. Supposethat a sampleof popcorn,and two medium soft drinks at a sampleof six
claims is selecteddurins the latest time theatrechains:
Thesamplemeantime from the date of serviceto 36.15 31.00 35.05 40.25 33.75 43.00
ofpaymentwas39.6 days,andthe samplestandard
was7.4 days. K. Kelly,"TheMultiplexUnderSiege,"
Source:Extractedfrom The
the 0.05 level of significance,is there evidence WallStreet
December 24-25,2005,pp.Pl, P5.
repopulationmeanhaschangedfrom 41.4 days? a. At the 0.05 level of significance,is there evidencethat
is your answerin (a) if you use the 0.01 level of the mean price for two tickets, with online service
charges,large popcorn,and two medium soft drinks, is
is your answerin (a) if the samplemeanis 38.2 different from $35?
andthesamplestandarddeviationis 10.7days? b. Determinethep-value in (a) and interpretits meaning.
c. What assumptionabout the populationdistributionis
article(N. Hellmich,"'SupermarketGuru'Hasa
neededin (a) and (b)?
Mantra;'USAToday,June 19, 2002,p. 70) claimed
d. Do you think that the assumptionstatedin (c) is seri-
typical supermarkettrip takes a mean of 22 min-
ously violated?
that in an effort to test this claim. vou select
of 50 shoppersat a local supermarket.The mean 9.59 In NewYork State,savingsbanksarepermittedto sell
time for the sampleof 50 shoppersis 25.36 min- a form oflife insurancecalled savingsbank life insurance
a standarddeviationof 7.24 minutes.Usins the (SBLI). The approvalprocessconsistsof underwriting,
352 CHAPTERNINE Fundamentals
of Hypothesis

which includesa reviewof the application,a medicalinfor- 54 5 35 137 31 27 t52 2 123 8l 74

mationbureaucheck,possiblerequestsfor additionalmed- ll t9 t26 l l 0 l l 0 2 9 6 1 3 5 94 31 26
ical informationandmedicalexams,anda policy compila- 12 4 165 32 29 28 29 26 2 5 l 1 4
tion stagein which the policy pagesare generatedand sent
13 10 5 27 452 3 0 2 2 36 26 20
to the bankfor delivery.The ability to deliverapprovedpoli-
cies to customersin a timely manneris critical to the prof- 33 68
itabilityof thisservice.Duringa periodof onemonth,aran-
dom sampleof 27 approvedpolicies is selected,and the a. The installationsupervisorclaims that the mean
total processing time, in days,is recorded(as storedin the of daysbetweenthereceiptof a complaintandthe
tion of the complaintis 20 daysor less.At the0.05
ofsignificance,is thereevidencethat the claimis not
73 19 16 64 28 28 31 90 60 56 31 56 22 18 (thatis, that the meannumberof daysis greaterthan
4s 48 l7 17 r7 9t 92 63 50 51 69 16 t7 b. What assumptionaboutthe populationdistribution
you makein (a)?
a. In the past,the meanprocessingtime was 45 days.At c. Do you think that the assumptionmadein (b) is
the 0.05 level of significance,is thereevidencethat the ouslyviolated?Explain.
meanprocessing time haschangedfrom 45 days? d. What effect might your conclusionin (c) haveon
b. What assumptionaboutthe populationdistribution is validity of the resultsin (a)?
neededin (a)? 9.62 A manufacturingcompanyproducessteel
c. Do you think that the assumptionstatedin (b) is seri- for electricalequipment.The main componentpartof
ouslyviolated?Explain. housineis a steeltroush that is madeout of a I
9.60 The following data(seethe !@ file) represent steelcoil. It is producedusinga 250-tonprogressive
the amountof soft-drinkfilled in a sampleof 50 consecu- presswith a wipe-downoperationthat puts two
tive 2-liter bottles.The results,listed horizontallyin the forms in the flat steelto make the troush. The di
orderof beingfilled, were: from onesideofthe form to the otheris criticalbecause
weatherproofingin outdoor applications.The
2.1092.0862.0662.0752.0652.0572.0522.0442.0362.038 requiresthatthewidth of thetroughbe between8.31i
2.0312.0292.0252.0292.0232.0202.0152.0142.0132.0t4 and 8.61inches.The datafile@@[!contains thewi
2.0t2 2.0122.0122.0102.0052.0031,9991.9961.9971.992 of thetroughs,in inches,for a sampleof n:49.
1 . 9 9 41 . 9 8 61 . 9 8 41 . 9 8 r1 . 9 7 31 . 9 7 5t . 9 7 1t . 9 6 9r . 9 6 61 . 9 6 7
8 . 3 1 28 . 3 4 38 . 3 1 78 . 3 8 38 . 3 4 88 . 4 1 08 . 3 5 18 . 3 7 38 . 4 8 18 . 4 n
t . 9 6 31 . 9 5 7t . 9 5 11 . 9 s 11 . 9 4 7r . 9 4 11 . 9 4 11 . 9 3 81 . 9 0 81 . 8 9 4
a. At the 0.05 level of significance,is thereevidencethat 8.4368.4138.4898.4148.4818.4r5 8.4798.4298.4588.462
the meanamountof soft drink filled is different from 8.4608.4448.4298.4608.4t2 8.4208.4108.4058.3238.420
2.0 liters? 8.3968.44'78.4058.4398.4118.4278.4208.4988.409
b. Determinethep-valuein (a) andinterpretits meaning.
c. Evaluatethe populationdistribution assumptionyou At the 0.05 level of significance,is thereevidence
madein (a) graphically.Are theresultsof (a) valid?Why? the meanwidths of the trouehsis different from 8.
d. Examinethe valuesof the 50 bottlesin their sequential inches?
order,as given in the problem.Is there a pattern to the b. What assumptionaboutthe populationdistribution
results?If so,what impactmight this patternhaveon the you needto makein (a)?
validity of the resultsin (a)? c. Do you think that the assumptionmadein (a) has
9.61 One of the major measures of the quality of service
providedby any organizationis the speedwith which it 9.63 One operationof a steelmill is to cut piecesof
respondsto customercomplaints.A large family-held into parts that are usedin the frame for front seatsin
departmentstoresellingfurnitureand flooring, including automobile.The steel is cut with a diamondsaw
carpet,hadundergonea major expansionin the pastseveral requiresthe resultingpartsto be within +0.005inch of
years.In particular,the flooring departmenthad expanded length specifiedby the automobilecompany.The datai
from 2 installationcrewsto an installationsupervisor,a the file @!lf!! comefrom a sampleof 100steelparts.The
measurer,and l5 installationcrews.Last year therewere measurement reportedis the difference,in inches,between
50 complaintsconcerningcarpetinstallation.The follow- the actual length of the steelpart, as measuredby a
ing data (storedin the@$ file) representthe num- measurementdevice,and the specified length of the steel
ber of daysbetweenthe receiptof a complaintand the res- part. For example,a value of -0.002 representsa steelpart
olutionof the complaint: that is 0.002inch shorterthanthe specifiedleneth.
for theproportion 353
9.5: ZTestof Hypothesis

7 a. At the0.05levelof significance, is thereevidence that 9.65 Although many people think they can put a meal on
5 themeandifferenceis not equalto 0.0 inches? the table in a short period of time, a recent article reported
b.Determine thep-valuein (a) and interpretits meaning. that they end up spending about 40 minutes doing so
c. Whatassumptionaboutthe differencesbetweenthe (N. Hellmich, 'Americans Go for the euick Fix for
actuallengthofthe steelpart andthe specifiedlengthof Dinner," USA Today,February 14,2006). Supposeanother
thesteelpart mustyou makein (a)'i study is conducted to test the validity of this statement.A
d.Evaluatethe assumptionin (c) graphically.Are the sample of 25 people is selected,and the length of time to
)er results of (a) valid?Why/ prepare and cook dinner (in minutes) is recorded,with the
9.64 In Problem3.63on page138,youwereintroduced following results (stored in the file E[lf[E)
/el to
ue atea-bag-filling operation.An importantqualitycharacter- 44.0 51.949.7 40.055.533.0 43.4 4t.3 45.240.74t.t 4g.t 30.9
isticof interestfor this processis the weightof the tea in
D? 45.255.352.155.138.843.1 39.258.649.843.247.946.6
rst theindividualbags.The data in the file [ll[!![! is an
ordered arrayof the weight,in grams,of a sampleof 50 tea a. Is there evidence that the population mean ume ro pre-
ri- bags produced duringan eight-hourshift. pare and cook dinner is greater than 40 minutes? Use a
a.Is thereevidencethat the meanamountof teaper bag is level of significanceof 0.05.
he differentfrom 5.5grams(usea : 0.0l)? b. What assumptionsare made to perform the test in (a) /
b.Construct a99%oconfidence intervalestimate of thepopu- c. Do you think the assumptionneededin (a) is seriously
lationmeanamountof teaperbag.Interpretthisinterval. violated?Explain.
gs c. Compare theconclusions reached in (a) and(b). d. Determinethe p-value and interpretits meaning.
In some situations,you want to test a hypothesisabout the proportion of successesin the popu-
lation, n' rather than testing the population mean. To begin, you select a random sample
ny and
compute the sample proportion, p: Xln. You then comparethe value of this statisticto
LCS the
hypothesizedvalue of the parameter,n, in order to decide whether to reject the null hypothesis.
If the number of successes(X) and the number of failures (n - X) are each at least five, the
sampling distribution of a proportion approximately follows a normal distribution. you use the
Z test for the proportion given in Equation (9.3) to perform the hypothesistest for the differ-
ence between the sample proportion, p, and the hypothesizedpopulation proportion, n.
z--: (e.3)
n ( 1- n )
Jo Numberof successesin the sample
n Samplerirr-
3n p : sampleproportionof successes
n: hypothesized
in thepopulation
andthe teststatisticZ approximately
followsa standardized
ne Alternatively,by multiplyingthe numeratoranddenominator
by n, youcanwrite theZ tesl
in statisticin termsof thenumberof successes,
x, asshownin Equation(9.4).
el X -nn
Z _ --- (e.4)
rrt lnn(l - n)
354 CHAPTERNINE Fundamentals
of Hypothesis

To illustratethe one-sampleZ testfor a proportion,considera surveyof independent

cery owners.In the survey,the ownerswere askedto considerwhat they believedto be
biggestcompetitivethreat. Somenoted large-chainsupermarkets, wholesaleclubs,and
independent grocers.Themostcommonresponse, givenby 78 of the l5l owners,wasthat
viewed Wal-Mart as their biggest competitive threat (Extractedfrom J. Tarnowski
D. Chanil,"To Serveand Connectl'TheProgressive Grocer,January1,2006,pp.60-65),
this survey,the null and alternativehypothesesare statedas follows:

Hn:n:0.50 (hat is, half of all independentgroceryownersview Wal-Martastheir

Hr: n* 0.50(thatis, eitherlessthanhalf or morethanhalf of all independent
ownersview Wal-Mart astheir biggestcompetitivethreat)

The CriticalValueApproach
Becauseyou are interestedin whetherthe proportion of independentgroceryowners
view Wal-Martastheir biggestcompetitivethreatis 0.50,you usea two-tailtest.If you
the a : 0.05 level of significance,the rejection and nonrejectionregionsare setup as
Figure9.14, andthe decisionrule is

t o i fZ < - l . 9 6 o r i f Z > + 1 . 9 6 ;
R e j e cH
otherwise,do not reject110.

Two-tailtest of
hypothesisfor the
proportionat the 0.05
levelof sionificance


Because78 ofthe 151of independent

groceryownersview Wal-Martastheirbiggest

78 =
'p = - 0.5166

Using Equation(9.3),

0 . 5 1 6-6 0 . s 0 o'0166=
Z_ 0.4069
ru(l- r) 0.50(l- 0.s0) 0.0407

or, usingEquation(9.4).

X-nn 7 8 - ( 1 5 1 X 0 . 5=0 ) 2 . 5 = 0 . 4 0 6 9
,,lnn(l- n) 6.144r
9.5: ZTcstof Hypothesis
for the Proportion 355

ro- Because-1.96 < Z:0.4069 < 1.96,you do not rejectHo. There is insufficientevidencethat the
reir proportion of independentgrocery owners who view Wal-Mart as their biggest competitive
ner threat is not 0.50. Figure 9.15 presentsMicrosoft Excel resultsfor thesedata. In other words,
rey the currentbelief that half of al1independentgrocersview Wal-Mart as their bigget competitive
lnd threatis not contradictedbv the Z test.
for the survey 3.
of independentgrocery 5
ownersand Wal-Mart
threat g
10. -S187
1 1. -soRT(8411- B{)r87}
l1 -{810- 84}1811
vho 15: -t{oRf,stilv(852}
SeeSectionE9.3 to create 16 -llORf,SlNV(1 ,852)
lect -2' (1 - ilORilSDrsT(ABS(Br?)))
this. 18' -lF{817< 85, -Rejad rhe null hypothe€is",
sin To not rejecrlho ilull hypoth6ls'J

The p-ValueApproach
As an alternativeto the critical value approach,you can computethe p-value. For this two-tail
test in which the rejectionregion is locatedin the lower tail and the uppertail, you needto find
the area below a Z value of -0.4069 and above a Z value of +0.4069. Figure 9.15 reports a
p-value of 0.684L Becausethis value is greaterthan the selectedlevel of significance(o : 0.05),
vou do not reiect the null hvnothesis.


A fast-foodchainhas developeda new processto ensurethat ordersat the drive-throughare
filled correctly.Thepreviousprocessfilled orderscorrectly85%of thetime.Basedon a sample
of 100ordersusingthenewprocess, 94 werefilled correctly.At the0.01levelof significance,
canyou concludethatthenewprocess hasincreased theproportionofordersfilled correctly?
SOLUTION Thenull andalternative

Hu:n3 0.85(thatis, theproportionof ordersfilled correctlyis lessthanor equalto 0.85)

Hr: n> 0.85(thatis, theproportionofordersfilled correctlyis greaterthan0.85)

(9.3)on page353,

p=1)_ =0.94
n 100
Z - i <1
-J/r (|r - 0.8s(Lq.8l) 0 . 0 3 5 7
n 100

The7r-value for Z > 2.52is 0.0059.

Usingthe criticalvalueapproach, you rejectHo if Z> 2.33.Usingthep-valueapproach,
y o u r e j e c t t l ni f t h e p - v a l u<e 0 . 0 1 .B e c a u sZe: 2 . 5 2 > 2 . 3 3 o r t h e p - v a l u e : 0 . 0 0 5<9 0 . 0 1 ,
you rejectHn.You haveevidencethat the new processhasincreased the proportionof correct
356 CHAPTER NINE Fundamentalsof HypothesisTesting:One-SampleTests

Learningthe Basics 2001,an estimated78% of executivesbelievedthat

wasa seriousproblem.lna2004 studyby ExecuNet,

ffi 9.66 If, in a randomsampleof 400 items,88 are

defective,whatis the sampleproportionof defec-
tive items?
the executivessurveyedconsideredagebias a serious
lem. The samplesizefor the 2004 study was not dt
Suppose50 executives weresurveyed.
a. At the 0.05levelof significance,usethe six-step
ffi 9.67 In Problem9.66, if the null hypothesisis
that20o/oof the items in the populationaredefec-
tive, what is the valueof the Z-teststatistic?
value approachto hypothesis-testingto try to
the 2004proportionof executiveswho believed
bias was a seriousproblemwas higher thanthe

ffi 9.68 In Problems9.66 and9.67, supposeyou

are testing the null hypothesisHn: n : 0.20
Hr: n*
valueof 0.78.
b. Use the five-stepp-value approach.Inte4
ing of thep-value.
0.20 and you choosethe level of significancecr : 0.05. c. Supposethat the samplesize usedwas
What is your statisticaldecision? (a) and (b).
Applying the Concepts d. Discussthe effectthat samplesizehad on the ou
of this analysisan4 in general,the effectthat
9,69 Late paymentof medicalclaimscan add to the cost sizeplaysin hypothesis testing.
of healthcare.An article(M. Freudenheim, "The CheckIs
9.72 A WallStreetJournal poll ("What'sNews
Not in the Mail," TheNew YorkTimes,May 25,2006,pp.
The Wall StreetJournal, March 30,2004, p. D7)
Cl, C6) reportedthat for oneinsurancecompany,85.1%of
respondents if they trustedenergy-efficiencyratingson
the claimswerepaid in full when first submitted.Suppose
andappliances; 552 responded yes,and531responded
that the insurancecompanydevelopeda new paymentsys-
a. At the 0.05 level of significance,usethe six-stepcri
tem in an effort to increasethis percentage. A sampleof
valueapproachto hypothesis-testing to try to prove
200 claimsprocessed underthis systemrevealedthat 180
the percentageof peoplewho trust energy-effici
of the claimswerepaid in full whenfirst submitted.
ratingsdiffers from 50%.
a. At the 0.05levelof significance,is thereevidencethatthe
b. Use the five-step p-valueapproach.Interpretthe
proportionof claimsprocessedunderthis new systemis
ing of thep-value.
higherthanthe articlereportedfor the previoussystem?
b. Computethep-value and interpretits meaning. 9.73 Oneofthe biggestissuesfacinge-retailersis the
to reducethe proportionof customerswho canceltheir
9.70 The high cost of gasolinein the springof
actionsafter they have selectedtheir products.It has
2006 had many people reconsideringtheir sum-
estimatedthat abouthalf of prospectivecustomers
mer vacationplans.A surveyof 464 Cincinnati-
their transactions after they have selected therr
areaadultsfoundthat 255 saidthat they wereplanningon (B. Tedeschi,"E-Commerce, a Cure forAbandoned
modifyingor cancelingtheir summertravelplansbecause
Carts:A WebCheckoutSystemThatEliminatestheNeed
of high gas prices ("Will You Travel?" The Cincinnati
Multiple Screens," February14,
Enquirer,May 3,2006,p. Al0.)
p. C3). Supposethata companychangedits Websiteso
a. Use the six-stepcritical value approachto hypothesis-
customerscould usea single-pagecheckoutprocess
testingand a 0.05 level of significanceto try to prove
than multiple pages.A sampleof 500 customerswho
that the majority of Cincinnati-areaadultswere plan-
selectedtheir productswere provided with the new
ning on modifying or cancelingtheir summertravel
system.Of these500customers, 2 I 0 cancelled
plansbecauseofhigh gasprices.
tionsafterthey haveselectedtheir products.
b. Usethe five-stepp-valueapproachto hypothesis testing
a. At the 0.01 level of significance,is thereevidence
and a 0.05 level of significanceto try to provethat the
the proportion of customerswho selectedproducts
majority of Cincinnati-areaadults were planning on
then cancelledtheir transactionwas lessthan0.50
modifying or canceling their summer travel plans
the new system?
because ofhigh gasprices.
b. Supposethat a sample of 100 customerswho
c. Comparethe resultsof (a) and(b).
selectedtheir products were provided with the
9.71 A WallStreetJournql article suggestedthat agebias checkoutsystemand that 42 of thosecustomerscan
wasa growingproblemin thecorporateworld (C. Hymowitz, celled their transactionsafter they had selectedthei
"Top ExecutivesChaseYouthfulAppearance, but Miss Real products.At the 0.01 level of significance,is thereev
February17,2004,p.BI). In
Issue,"TheWallStreetJournal, dencethat the proportion of customerswho selecte
9.6: Potential
PitfallsandEthicalIssues 357

and then cancelledtheir transactionwas less Plotting Mix of Work and Family Won't Find perfectplan,"
0,50with the new system? The WallStreetJournal, June11, 2002,p. Bl). Assumethat
the resultsof(a) and (b) and discussthe effect the group of 187 women was a randomsamplefrom the
samplesize has on the outcome,and,in general,in populationof all successfulwomenexecutives.
a. What was the sampleproportion of successfulwomen
executiveswho had children?
Moreprofessionalwomenthan everbefore are forgo- b. At the 0.05 level of significance,can you statethat more
becauseof the time constraintsof their thanhalf of all successfulwomenexecutiveshad children?
However,manywomenstill manageto find time to c. At the 0.05 level of significance,canyou statethat more
the corporateladderand settime asideto havechil- than two-thirds of all successfulwomen executiveshad
A surveyof I 87 attendeesat FortuneMagazine'sMost children?
Womenin Businesssummit in March 2002 found d. Do you think the random sampleassumptionis valid?
133had at least one child (C. Hymowitz, "Women Explain.

To this point, you havestudiedthe fundamentalconceptsof hypothesistesting.You haveused
hypothesistestingto analyzedifferencesbetweensampleestimates(that is, statistics)and
hypothesizedpopulation characteristics(that is, parameters)in order to make businessdeci-
sionsconcerningthe underlyingpopulationcharacteristics. You havealso learnedhow to eval-
uatethe risks involvedin making thesedecisions.
When planning to carry out a test ofthe hypothesisbasedon a survey,researchstudy,or
designedexperiment,you must ask severalquestionsto ensurethat you useproper methodol-
ogy.You needto raiseand answerquestionssuchas the following in the planningstage:
1 . What is the goal of the survey,study,or experiment?How can you translatethe goal into a
null hypothesisand an alternativehypothesis?
2. Is the hypothesistest a two-tail test or one-tailtest?
3. can you selecta randomsamplefrom the underlyingpopulationof interest?
4. What kinds of datawill you collect from the sample?Are the variablesnumericalor cate-
5. At what significancelevel, or risk of commiuing a Type I error, shouldyou conductthe
6. Is the intendedsamplesize large enoughto achievethe desiredpower of the test for the
level of significancechosen?
7. What statisticaltestprocedureshouldyou useand why?
8. What conclusionsand interpretationscanyou reachfrom the resultsof the hypothesistest?
Failing to considerthesequestionsearly in the planningprocesscan lead to biasedor
incompleteresults.Properplanningcanhelp ensurethat the statisticalstudywill provideobjec-
tive informationneededto makegood businessdecisions.

Statistical SigniftcanceVersus Practical Signifrcance You needto makethe distinc-

tion betweenthe existenceof a statistically significant result and its practical significance in the
contextwithin a field of application.Sometimes,dueto a very largesamplesize,you may get a
resultthatis statisticallysignificantbut haslittle practicalsignificance.For example,supposethat
prior to a nationalmarketingcampaignfocusingon a seriesof expensivetelevisioncommercials,
you believethat the proportionof peoplewho recognizeyour brandis 0.30.At the completionof
the campaign,a surveyof 20,000peopleindicatesthat 6,168recognizedyour brand.A one-tail
test trying to prove that the proportion is now greaterthan 0.30 resultsin ap-value of 0.0047and
the correct statisticalconclusionis that the proportion of consumersrecognizingyour brandname
hasnow increased. Wasthe campaignsuccessful? The resultof the hypothesistestindicatesa sta-
tistically significantincreasein brandawareness, but is this increasepracticallyimportant?The
populationproportionisnowestimatedat6,16S120,000:0.3084, or3}.S4Vo.Thisincreaseisless
than l%omore than the hypothesizedvalue of 30o/o.Did the large expensesassociatedwith the
358 CHAPTER NINE Fundamentalsof HypothesisTesting:One-sampleTests

marketingcampaignproducea resultwith a meaningfulincrease in brandawareness?

the minimal real-worldimpactan increaseof lessthan lo/ohason the overallmarketins
and the hugeexpenses associatedwith the marketingcampaign,you shouldconcludethat
campaignwas not successful.On the otherhan4 if the campaignincreasedbrandawareness

Ethical Issues You also need to distinguishbetweenpoor researchmethodology

unethicalbehavior.Ethicalconsiderations processis mani
lated.Someof the areaswhereethicalissuescan ariseincludethe use of humansubiects
experiments,data collection method, informed consent from human subjects being
the type of test (one-tail or two-tail test), the choice of the level of significance, data
the cleansingand discarding ofdata, and the failure to report pertinent findings.

Informed Consentfrom Human Respondents Being "Treated" Ethical

erationsrequirethat any individualwho is to be subjectedto some"treatment"in an e
ment be made aware of the research endeavor and any potential behavioral or physical
effects.The person should also provide informed consentwith respectto participation.

Data Collection Method-Randomization To eliminatethe possibilityof

biasesin the results,you mustuseproperdatacollectionmethods.To drawmeaningful
sions,the datamustbe the outcomeof a randomsamplefrom a populationor from an
mentin which a randomizationprocesswasused.Potentialrespondents shouldnot be
ted to self-selectfor a study,nor shouldthey be purposelyselected.Aside from the
ethicalissuesthatmay arise,sucha lack of randomization canresultin seriouscoverage
or selectionbiasesthat destroythe integrityofthe study.

Type of Test-Two-Tail or One-Tsil Test If prior information is availablethat leads

you to testthe null hypothesisagainsta specificallydirectedalternative,thena one-tailtestis
more powerful than a two-tail test. However,if you are interestedonly in diferencesfrom the
null hypothesis, not in thedirectionof thedifference,the two-tailtestis the appropriate proce-
dure to use.For example,if previousresearchand statisticaltestinghavealreadyestabli
the differencein a particulardirection,or ifan establishedscientifictheorystatesthat it is
sible for resultsto occur in only one direction,then a one-tailtest is appropriate.It is never
appropriate to changethe directionofa testafterthe dataarecollected.

Choice of Level of SigntJicance, a. In a well-designedstudy,you selectthe levelof

significance,cr, beforedatacollectionoccurs.You cannotalterthe level of significanceafter
the fact to achievea specificresult.You shouldalwaysreportthep-value,notjust the conclu-
sionsofthe hypothesis test.

Data Snooping Data snoopingis neverpermissible.It is unethicalto performa hypothe-

sisteston a setofdata, look at the results,andthenspecifythe levelofsignificanceor decide
whetherto usea one-tailor two-tailtest.Youmustmakethesedecisionsbeforethedataarecol-
lectedin orderfor the conclusionsto be valid.In addition,you cannotarbitrarilychangeor dis-
cardextremeor unusualvaluesin orderto alterthe resultsofthe hypothesis tests.

Cleansing and Discarding of Data In the data preparationstageof editing, coding,

andtranscribing,you havean opportunityto reviewthe datafor any extremeor unusualvalues,
After reviewingthe data,you shouldconstructa stem-and-leaf displayand/ora box-and-
whiskerplot to determinewhetherthereare possibleoutliersto double-check againstthe
The processof datacleansingraisesa major ethicalquestion.Shouldyou everremovea
valuefrom a study?The answeris a qualifiedyes.If you candeterminethat a measurement ls
incompleteor grossly in error becauseof someequipmentproblem or unusualbehavioral
Summary 359

occurrenceunrelatedto the study,you can discardthe value. Sometimesyou haveno choice-

an individual may decideto quit a particularstudyhe or shehasbeenparticipatingin beforea
final measurement can be made.In a well-designedexperimentor study,you shoulddecide,in
advance,on all rules regardingthe possiblediscardingof data.

Reporting of Findings In conductingresearch,you shoulddocumentboth good andbad

results.You shouldnot just report the resultsof hypothesisteststhat show statisticalsignifi-
cancebut omit thosefor which there is insufficient evidencein the findings. In instancesin
which thereis insufficientevidenceto rejectlllo, you mustmakeit clearthat this doesnot prove
that the null hypothesisis true. What the result doesindicateis that with the samplesizeused,
thereis not enoughinformationto disprovethe null hypothesis.

Summary To summarize,in discussingethicalissuesconcerninghypothesistesting,the

key is intent.Youmustdistinguishbetweenpoor dataanalysisandunethicalpractice.Unethical
practiceoccurswhen researchers intentionally createa selectionbias in datacollection,manip-
ulatethe treatmentof humansubjectswithout informed consent,usedatasnoopingto selectthe
type oftest (two-tailor one-tail)and/orlevel ofsignificance,hide the factsby discardingval-
uesthat do not supporta statedhypothesis,or fail to report pertinentfindings.


Section9.1 definesTypeI andTypeII errorsand the powerof the test. In $@Ef[E[on the
StudentCD-ROM, the powerof the test is examinedin greaterdepth.

chapter presentedthe foundation of hypothesistest- improvea cereal-fill process.The threechaptersthat follow

learnedhow to perform Z andt testson the popu- build on the foundationof hypothesistesting discussed
meanand the Z test on the population proportion. here.
learnedhow an operationsmanagerof a produc- Figure9.16 presentsa roadmapfor selectingthe cor-
ility can use hypothesistesting to monitor and rect one-samplehypothesistest to use.

for selecting

L -l@

Cateqorical Numerical

l- D;1"-
lr 6

g;zr"*t to, tt e No -- -
LP.*"il; f .*n?*n
t fTest ::
$* *i.t
360 CHAPTERNINE Fundamentals
of Hypothesis
Testing: Tests

In decidingwhich test to use,you should ask the fol- . If the test involves a numerical variable. do you
lowing questions: thepopulationstandard deviation?Ifyou knowthe
ulation standarddeviation.use the Z test for the
. Doesthe test involve a numericalvariableor a categori- you do not know the populationstandarddeviati
cal variable?If the test involvesa categoricalvariable, the I test for the mean.
usethe Ztestfor the proportion. Table9.4 providesa list of topicscoveredin this

TABLE 9.4 Tlpe of Data

Summaryof Topics Tlpe ofAnalysis Numerical Categorical
in Chaoter9
Hypothesistestconcerning Z test ofhypothesisfor the Z test ofhypothesis
a singleparameter mean(Section9.2) proportion(Section

I test ofhypothesisfor the


ZTestof Hypothesis for the Mean (o Known) One Sample ZTest for the Proportion
X -p, p-n
Z_ (e.1)

/Test of Hypothesis for the Mean (o Unknown) ZTest for the Proportion in Terms
x -1t of the Numberof Successes
,s Z _ ---
X -nn
T, lnn(r - n)

o (levelofsignificance) 331 levelof significance(a) 331 sampleproportion 353

alternativehypothesis(111) 329 null hypothesis(F1s) 328 I test of hypothesisfor a mean 346
B risk 332 one-tailtest 343 teststatistic 330
confidencecoefficient(l - cr) 332 p-value 337 two-tail test 334
confidencelevel 332 powerof a statisticaltest 332 TypeI error 331
criticalvalue 331 randomization 358 TypeII error 331
datasnooping 358 regionofnonrejection 330 Z testof hypothesisfor the mean 3
directionaltest 343 regionofrejection 330 Ztestfor the proportion 353
hypothesistesting 328 robust 350 Ztest statistic 334

CheckingYour Understanding 9.77 What is meantby the powerof a test?

9.75 What is the differencebetweena null hypothesis,F16,
and an alternativehypothesis,11,? 9.78 What is the differencebetweena one-tailtest and
two-tail test?
9.75 What is the differencebetweena Type I error and a
TypeII error? 9.79 What is meantby ap-value?
Problems 361

How cana confidenceinterval estimatefor the pop- d. How do changesin the rejection criterion affect the
meanprovide conclusionsto the corresponding probabilitiesof committingTypeI andTypeII errors?
sistestfor the populationmean? 9.85 In 2006,Visa wantedto move awayfrom its long-
running televisionadvertisingthemeof "Visa, it's every-
What is the six-step critical value approachto
where you want to be." During the Winter Olympics,Visa
is testing?
featuredOlympiansin commercialswith a broadermessage,
Whatare someof the ethical issuesinvolvedwith including securiry check cards,and paymenttechnologies
ing a hypothesistest? suchascontactless processing.One of the first commercials
featuredsnowboarderLindsey Jacobellisbeing coachedto
the Concepts calm down before a big race by imaginingthat her Visa
An article in Marketing News (T. T. Semon, CheckCardgot stolen.A key metric for the successof tele-
ider a StatisticalInsignificanceTest," Marketing vision advertisements is the proportionof viewerswho "like
Februaryl,1999) arguedthat the level of signifi- the adsa lot." HarrisAd ResearchServiceconducteda study
usedwhen comparingtwo products is often too of 903 adultswho viewedthe new Visa advertisementand
is, sometimesyou shouldbe using an ct,value reported that 54 indicated that they "like the ad a lot."
than0.05.Specifically,the article recountedtesting According to Harris, the proportion of a typical television
ion of potentialcustomerswith a preferencefor advertisement receivingthe "like the ad a lot" scoreis 0.21
I overproduct2.The null hypothesiswas that the (Extractedfrom T. Howard "Visa to ChangeStrategiesin
ion proportionof potential customerspreferring UpcomingAds," usatoday.com,January23, 2006.).
I was0.50,and the alternativehypothesiswasthat a. Use the six-stepcritical value approachto hypothesis
notequalto 0.50.Thep-valuefor the testwas 0.22. testingand a 0.05 level of significanceto try to prove
articlesuggestedthat in somecases,this shouldbe that the newVisa ad is lesssuccessfulthan a typical tele-
evidenceto rejectthe null hypothesis. vision advertisement.
the null and alternativehypothesesfor this exam- b. Use the five-step p-valueapproachto hypothesistesting
plein statisticalterms. and a 0.05 level of significanceto try to prove that the
Explainthe risks associatedwith Type I and Type II new Visa ad is less successfulthan a typical television
in thiscase. advertisement.
wouldbe the consequences ifyou rejectedthenull c. Comparethe resultsof (a) and(b).
hesisfor a p-valueof 0.22? 9.86 The ownerof a gasolinestationwantsto studygaso-
do you think the article suggestedraising the line purchasinghabitsby motoristsat his station.He selects
of s? a randomsampleof 60 motoristsduring a certainweek,
wouldyou do in this situation? with the following results:
is your answerin (e) if thep-value equals0.12? . The amount purchasedwas .F : ll.3 gallons,
if it equals0.06? ^t: 3.1gallons.
. 1l motoristspurchasedpremium-gradegasoline.
La QuintaMotor Innsdevelopeda computermodelto
predictthe profitability of sitesthat are being consid- a. At the 0.05 level of significance,is there evidencethat
aslocationsfor new hotels.If the computermodelpre- the meanpurchasewas different from l0 gallons?
largeprofits, La Quinta buys the proposedsite and b. Determinethep-valuein (a).
a newhotel.If the computermodelpredictssmall or c. At the 0.05 level of significance,is there evidencethat
profits,La Quintachoosesnot to proceedwith that fewer than 20%oof all the motorists at the station pur-
(Extracted from S. E. Kimes and J. A. Fitzsimmons, chasedpremium-gradegasoline?
ing Profitable Hotel Sites at La Quinta Motor d. What is your answerto (a) if the samplemeanequals
Vol. 20, March-April 1990,pp.12-20). 10.3gallons?
l' Interfaces,
decision-making procedurecan be expressedin the e. What is your answerto (c) if 7 motoristspurchased pre-
is-testingframework.Thenull hypothesisis thatthe mium-grade gasoline?
is nota profitablelocation.The alternativehypothesisis 9.87 An auditor for a governmentagencyis assignedthe
thesiteis a profitablelocation. task of evaluatingreimbursementfor office visits to physi-
ain the risks associated with committinga Type I cianspaid by Medicare.The audit wasconductedon a sam-
in this case. ple of 75 of the reimbursements,
with the following results:
in the risks associatedwith committing a Type II . ln 12 of the office visits, an incorrectamountof
errorin this case. reimbursementwas provided.
Whichtype of error do you think the executivesat La . The amountof reimbursementwas X : S93.70.
intaMotor Inns aretrying hard to avoid?Explain. ^s:s34.55.
362 of Hypothesis
CHAPTERNINE Fundamentals Testing:

a. At the 0.05 level of sigaificance, is there evidencethat 9.9O An important quality characteistic used by the
themeanreimbursement waslessthan$I00? ufacturerof Boston and Vermontasphaltshinglesis
b. At the 0.05 level of significance,is thereevidencethat amount of moisturethe shinelescontain when thev
the proportionof incorrectreimbursements in the popu- packaged.Customersmay feel that they have
lationwasgreaterthan0.10? product lacking in quality if they find moistureand
c. Discusstheunderlyingassumptions of thetestusedin (a). shinglesinsidethe packaging.In somecases,
d. Whatis your (a)
answerto if the samplemeanequals$90? moisturecancausethe sranulesattachedto the shinsle
e. What is your answerto (b) if 15 office visits had incor- textureandcoloringpurposesto fall offthe shingle,
rect reimbursements? ing in appearanceproblems.To monitor the amount
moisturepresent,the companyconductsmoisture
9.88 A bankbranchlocatedin a commercialdistrictof a
s h i n g l e i s w e i g h e d a n d t h e n d r i e d . T h e s h i n g l ei s
city has developedan improvedprocessfor servingcus-
reweighed,and,basedon the amountof moisturetaken
tomersduring the noon-to-1:00p.m. lunch period.The
of the product,the poundsof moistureper 100square
waiting time (definedas the time the customerentersthe
are calculated.The companywould like to showthat
line until he or shereachesthe teller window) of all cus-
meanmoisturecontentis lessthan 0.35 poundsper
tomersduringthis hour is recordedovera periodof I week.
A random sample of 15 customers(see the data file
squarefeet.Thedatafile @@fs includes36
ments(in poundsper 100squarefeet) for Bostonshi
!l@!) is selected,and the resultsare as follows:
and31 for Vermontshinsles.
4.21 5.55 3.02 5.13 4.77 2.34 3.54 3.20 a. For the Boston shingles,is there evidenceat the
4.50 6.10 0.38 5.12 6.46 6.r9 3.79 level of significancethat the mean moisture
a. At the 0.05 level of significance,is thereevidencethat lessthan0.35poundsper 100squarefeet?
the meanwaitingtime is lessthan5 minutes? b. Interpretthe meaningof thep-valuein (a).
b. What assumptionmust hold in order to perform the test c. For the Vermontshingles,is thereevidenceat the
in (a)? level of significancethat the mean moisturecontent
c. Evaluatethe assumptionin (b) through a graphical lessthan0.35poundsper 100squarefeet?
approach. Discuss. d. Interpretthe meaningof thep-valuein (c).
d. As a customerwalks into the branchoffice during the e. What assumptionmusthold in orderto performthe
lunch hour, she asksthe branchmanagerhow long she in (a) and(c)?
canexpectto wait.Thebranchmanagerreplies,'Almost f. Evaluatethe assumptionin (e) for Boston shingles
certainlynot longerthan5 minutes."On the basisof the Vermontshinglesby usinga graphicalapproach.Di
resultsof (a), evaluatethis statement. 9.91 Studiesconductedby the manufacturerof
9.89 A manufacturingcompanyproduceselectricalinsula- and Vermont asphaltshingleshave shownproductwei
tors. If the insulatorsbreakwhen in use,a short circuit is to be a major factor in the customer'sperceptionof
likely to occur.To testthe shengthof the insulators,destruc- Moreover,the weight representsthe amountof raw
tive testing is carried out to determinehow muchforce is als being usedand is thereforevery importantto the
requiredto break the insulators.Force is measuredby pany from a cost standpoint.The last stageofthe
observingthe numberof poundsof force appliedto the line packagesthe shinglesbefore the packagesare
insulatorbeforeit breaks.The following data(storedin the on woodenpallets.Oncea palletis full (a palletfor
[!@! file) arefrom 30 insulatorssubjectto thistesting: brandsholdsl6 squares of shingles),it is weighedand
measurementis recorded.The data file [!fts@
Force(in theNumberof PoundsRequired
the weight (in pounds)from a sampleof 368 pallets
to BreaktheInsulator)
Bostonshinglesand330 palletsof Vermontshingles.
t,870 1,728 1,6561,610 1,6341,784 1,5221,6961,5921,662 a. For the Bostonshingles,is thereevidencethatthe
weightis differentfrom 3,150pounds?
1,8661,764 1,7341,6621,7341,774 1,5501,7561,762 1,866
b. Interpretthe meaningof thep-valuein (a).
1,8201,744 1,7881,6881,8101,752 1,6801,810 1,6521,736 c. For the Vermont shingles,is there evidencethat
meanweight is different from 3,700pounds?
a. At the 0.05 level of significance,is thereevidencethat
d. Interpretthe meaningof thep-valuein (c).
themeanforceis greaterthan 1,500pounds?
e. What assumption is neededfor (a) and(c)?
b. What assumptionmust hold in order to perform the test
f. Evaluatethis assumptionthrougha graphical
in (a)?
c. Evaluatethe assumptionin (b) through a graphical
approach. Discuss. 9.92 The manufacturerof Boston and Vermont
d. Basedon (a), what canyou concludeaboutthe strength shinglesprovidesits customerswith a 20-yearwarranty
of the insulators? most of its products.To determinewhethera shingle

longasthe warrantyperiod accelerated-life testingis b. lnterpretthe meaningof thep-value in (a).

at the manufacturingplant.Acceleratedlifetest- c . For the Vermont shingles,is there evidencethat the
theshingleto the stressesit would be subjectto meangranuleloss is different from 0.50 grams?
ime of normal use in a laboratory setting via an d. Interpretthe meaningof thep-value in (c).
thattakesonly a few minutesto conduct.In this e . What assumptionis neededfor (a) and (c)?
shingleis repeatedlyscrapedwith a brushfor a short f. Evaluatethis assumptionthrough a graphicalapproach.
of time, and the shingle granulesremovedby the Discuss.
areweighed(in grams).Shinglesthat experience
Report Writing Exercises
amounts of granulelossare expectedto last longerin
usethanshinglesthat experiencehigh amountsof 9.93 Referring to the resultsof Problems9.90-9.92 con-
uleloss.The datafile !@ containsa sampleof cerningBostonand Vermontshingles,write a reportthat
ts madeon the company'sBostonshingles evaluatesthe moisturelevel,weight,andgranulelossof the
140measurements madeon Vermontshineles. two typesof shingles.
theBostonshingles,is thereevidencethat the mean
lossis differentfrom 0.50 srams?

its monitoringof the blacknessof the news- is evidence that the mean blackness is less than 0.97. Write
print, first describedin the Chapter6 Managing a memo to management that summarizes your conclusions.
Herald case,the productiondepartmentof
Blackness of 50 Newspapers
newspaper wantsto ensurethat the meanblacknessof the
for all newspapers is at least0.97 on a standardscale 0 . 8 5 41 . 0 2 31 . 0 0 51 . 0 3 01 . 2 t 90 . 9 7 7r . 0 4 40 . 7 7 8t . t 2 2 1 . t 1 4
ich the targetvalue is 1.0.A randomsampleof 50 1.0911.0861.1410.9310.7230.9341.0601.0470.8000.889
hasbeenselected,and the blacknessof each 1 . 0 1 20 . 6 9 50 . 8 6 90 . 7 3 41 . 1 3 10 . 9 9 30 . 7 6 20 . 8 1 41 . 1 0 80 . 8 0 5
hasbeenmeasured(and storedin the !fi! file). r . 2 2 3 r . 0 2 40 . 8 8 40 . 7 9 90 . 8 7 00 . 8 9 80 . 6 2 10 . 8 1 8l . l l 3 1 . 2 8 6
thesamplestatisticsand determinewhetherthere 1 . 0 5 20 . 6 7 81 . 1 6 20 . 8 0 81 . 0 1 20 . 8 5 90 . 9 5 1L l t 2 1 . 0 0 30 . 9 7 2

your knowledgeabout hypothesistestingin this Web www.prenhall.com/Springvilte/OC_FullUp.htm,and

which continues the cereal-fill-packaging dispute then answerthe following:
CasefromChapter7. 1. Are the resultsof the independenttestingvalid?Why or
Concerned aboutstatementsof groupssuch as the why not?If you wereconductingthe experiment,is there
mersConcernedAbout CerealCheaters(CCACC) anythingyou would change?
the Web Case for Chapter 7). Oxford Cereals , Do the resultssupportthe claim that Oxford Cerealsis
tly conducteda public experiment concerning
not cheatingits customers?
packaging.The companyclaimsthat the resultsof
experimentsrefute the CCACC allegations that 3. Is the claim of the Oxford CerealsCEO that manycereal
Cerealshasbeencheatingconsumersby packag- boxescontainmorethan368 gramssurprising?Is it true?
cerealsat less than labeled weiehts. Review the 4. Could thereeverbe a circumstancein which the results
Cereals'pressreleaseand supportingdocuments of the public experimentsnd the CCACC's results are
describethe experimentat the company'sWeb site, both correct?Explain.

Bradley,J. Y, Distribution-Free Stqtistical Zesls(Upper 3 . MicrosoftExcel 2007 (Redmond,WA: Microsoft Corp.,

SaddleRiver,NJ: PrenticeHall, 1968). 2007\.
Daniel,W., Applied NonparametricStatistics,2nd ed.
(Boston:HoughtonMifflin, 1990).
364 EXCELcoMPANIoNto chapter9

StatisticsKnown and enterthosevalues.Otherwise, cli

E9.1 USINGTHEZ TESTFOR SampleStatisticsUnknown and enterthe cell range
THEMEAN (o KNOWN) your sampleasthe SampleCell Range.Thenclickone
Youconducta Ztestfor themean(o known)by eitherselect- the testoptions,entera title asthe Title' andclick OK'
ing the PHStat2ZTest for the Mean,sigmaknownproce-
dureor by makingentriesin the[f!1filworkbook'
Using Z Mean.xls
Usinq PHStat2 Z Test You open and use either the ZMean TT or ZMean-All
worksheetsof the fif,!1fi! workbook to apply the Z test
for the Mean, Sigma Known
for the mean (o known). These worksheetsusethe
SelectPHStat ) One-SampleTests) ZTest for the NORMSINVe<n function to determinethe lowerand
Mean, sigma known. In theZ Testfor the Mean,sigma uppercritical valuesand usethe NORMSDIST(Z value)
known, dialogbox (shownbelow),entervaluesfor the functionto computethep-valuesfrom theZ valuecalculated
Null Hypothesis,the Level of Significance,and the in cell 812. The ZMean-TT worksheet(seeFigure9'5on
PopulationStandard Deviation. If you know the sample page338) appliesthe two-tailZ testto the Example9'2
size and samplemean of your sample,click Sample cereal-fillexample.TheZMean-All worksheet(seeFigure
E9.l) includesboth the two-tail test and the upper-and
lower-tailtestson one worksheet.To adaptthesework-
sheetsto otherproblems,change(if necessary) thenull
hypothesi s, levelof significance, standard
population devi'
O€t6 and sample meanvalues in the tinted
ation, samplesize,
l{I Ftypotha*s: cells84 through88.
Lcvd of Sigr*icrnca: lf you want the ZMean-'\l\ worksheetto showonly
Poptidkrr Stardard Dcviathn: one of the single-tailtests,first makea copyof thatwork'
sheet(seethe ExcelCompanionto Chapterl)' Fora lower'
Satr$ staHdlcsOptims
tail-test-onlyworksheet,selectand deleterows25 through
A Empte**stks Knsnn
28 and thenselectand deleterows 14 through19.Foran
Sarple Sael upper-tail-test-only worksheet,selectand deleterows14
Ssrplc Mcan; throush24.
a sdndc StatistksUrifig,rytl

r--*-; About the lF Function
Both worksheetsof theEEEEEIE*orkbook and all other
hypothesis-testingworksheets presented in the restofthe
book use the IF (comparison,what to do if comparison
rd T$n-TC Test holds,what to do if comparisonfails) functionto suggest
|* lSpcr-TailTart whether you should reject the null hypothesis.(You
f Uxner-td te* shouldalwaysverify the resultsof worksheetsandnot
blindly acceptresultsreportedby formulascontainingthe
0utfut Options IF function.)
Ttle; T--- You need to supply threethings when using an IF
functionin a formula.The comparisonis an algebraicor
logicalcomparisonbetweentwo things.In FigureE9'1,
thep-valuesarecompared to the levelof significance'
E9.2: Using the I Testfor the Mean (o Unknown) 365

1 ZTest oflhe
ZMean_All I

10 lntermedialeCalculalions
11 -86isQRT{87}
*(88 - B{lrB11
K 14
f 15 Lowel =l,lORMSll{V{85/21
tb =l{ORlrlSll{V{t- 8512}
f l7 o-Valrte =2 - {1 - }|ORh|SO|ST{ABS{812D}
1g *lF{Bt7 < 85, "Re.lectthe null hypothesis",
'19 'llo rot reJecllhe null hypothesis'J
n -NORIiSDTST{812}
ZJ *lF(822 < 85, "Rej6crtho nrll hypotfteris",
)1 "Do ool rejgct ths null hypolheels']
x -xoRtislNv{l - 85)
27 -1 " ilOR['tSDtST{812}
2S -lF{827 < 85, "Rojeclthe n$ll hypolhesl$",
"0o ttot rejectlhc rull hyporhesic'J

Whatto do if comparisonholds(alls areeithertext val- values.Otherwise,click Sample Statistics Unknown and

uesto display(asin FigureE9.1)or numericvaluesor for- enter the cell range of your data as the Sample Cell Range.
mulas to useas the cell contents.In FigureE,9.l, "Do not Then, click one of the test options, enter a title as the Title,
rejectthenull hypothesis"is displayedin rows 18,23, and and click OK.
28because all threep-values(in cellsB1l,822, and827)
aregreater thanthelevelof significancein cell 85. (By the
way,textvaluesin IF functionsmustbe enclosedby a pair
ofquotation marksasthey arein FigureE9.1.)
Youshouldalwaysenter formulas containingthe IF tuta
function asa single,continuousline, eventhoughsuchfor- Nr.$l-lypsthesisr I

mulas aregenerallyshownin this text on two physicallines Levelof $gr$ficancer ;

(asin FigureE9.1).For the hypothesis-testing worksheets, SempbStalnticsOSions
theformulascontainingthe IF functionhavebeenentered r; ssnple Stsfristic$
intocolumnA cellsso that their text valuesdisolavacross
columns A andB. Sanple5izer
Sarple Meen:

SsfiSleStondardDevi&ionr t*
THE MEAN (o unknown)
{*' 5ampleSsistics Ur*q"rary*n
*** --_:
Youconduct a / test for the mean (o unknown) by either
the PHStat2 t Test for the Mean, sigma unknown
procedureorby making entries in the@l$frworkbook.
r Two-TdTes*
UsingPHStat2 t Test r-' 1$Pr-TeilTest
for the Mean, Sigma Unknown ,l".'Lower-TnilTe*
SelectPHStat ) One-Sample Tests ) t Test for the
Mean,sigma unknown. In the t Test for the Mean, sigma Odp.rt Options
unknowndialog box (shown at right), enter values for the Titler :
Null Hypothesis and the Level of Significance. lf you
knowthe sample size, sample mean, and sample standard
deviation,click Sample Statistics Known and enter those
- -t*"*-i _.. jl
li_..__a-K csrcd j

366 ExcELcoMPANIoN 9

Td for thr linort-b of tlu Xrat
TMeanAllworksheet 2
3 Oata
lwrl of Slonficarca 0.
5 r Slzr
r larll llit.fi
I r Silndanl D.Yldon m,
lntarmsdiste Celculatione
l 1 ilandard Enor ofthg Mean 6.trlt( -B0xsORT{86}
armes of Fmsdom -86-1
Trd Staddc l.tllr -{87 -il}Alr
Two.Tdl Tet
1 E ow.r Ctl{crl Vilu. 2mil --(nl{vps,814)
t7 )oa1 ua 2.Z$11 -nilvGt, Br2l
r.Vr||r. 0. -TI,IST(ABS(Bt3), Br2,2)
19 Do nol ral6cl $. null lwooth.dr -lF{818< Bli, 'Rsl.ct tln null lrypolbedr',
n 1)o not r.r..t ilr. null hypo{hrlbJ
21 Loser-Tall Ted
2. Low.r Crl0c.l V!lu. -t -{n|wc.85, Bt2,,
n o-V.lu. 0.t29( -lF(Bl3<0,EA,ffil
Ilo not rel.cl ft. null lmolh* -lFlBil3 < Hi, 'ReJcc{th. nufl lrSpothe*',
x 'Do mt rcJ.c{$. null hypothrdr'}
zl rDal crldcrl yrlua t.lgt! -milvg.s,8r4)
B o-V!lr|. 0r70a -lF(Bl3< O,E/l.,r7'l
Do nol rcle cl th. null hwolhedr -lF(ElE < 8li, 'R.r.cl lfte null hpolhcrb',
not rdea rhc mll lrypo&crb'|
CollEl2: -TIIIST0ABS{B|3},
C-cllg}3: -1 -sn


You open and use either the TMean_TT or TMean_All THE PROPORTION
worksheetsof the ft!fi! workbook to apply the I test You conducta Ztest for the proportion by either se
for the mean (o unknown). These worksheetsuse the the PHStat2Z Testfor the Proportionprocedureor by
TlNY(l-conJidence level, degreesoffreedom) function to ing entriesin theEIEEEE@ workbook.
determinethe lower and upper critical valuesand to com-
pute the p-values. They also use the TDIST(ABS(I),
degreesof freedom,fails) function in which ABS(r) is the Using PHStat2 Z Test for the Propoftion
absolutevalueof the / test statisticandtuils is either I for a SelectPHStat ) One-SampleTests ) Z Test for
one-tailtest or 2 for a two-tail test. Proportion. Inthe Z Test for the Proportiondialog
The TMean_TT worksheet(seeFigure9.10 on page (shown below), enter values for the Null Hypothesis,
348) appliesthe two-tail I test to the Section 9.4 sales
invoicesexample.The TMean_All worksheet(seeFigure
E9.2) includesboth the two-tail test and the upper- and
lower-tail testson one worksheet.To adaptthesework-
sheetsto other problems,change(if necessary)the null ildttypnthdr
hypothesis,level of significance, sample size, sample
i tarulofgfrftrmr
mean,and samplestandarddeviation values in the tinted
i frfr$crof 9ffir
cells 84 through 88. To better understandhow a message
getsdisplayedin theseworksheets,read the 'About the IF i Sandcszol
If you want the TMean_All worksheetto show only l
i It trp-TdTast
one of the single-tailtests,first make a copy of that work- i

r $pr-f*rr*
sheet(seethe Excel Companionto Chapterl). For a lower-
tail-test-onlyworksheet,selectand deleterows 26 through f uru-rdta*
29 andthen selectand deletecell rangeAl5:B20. For an
upper-tail-test-onlyworksheet,selectand deletecell range
Al5:B25. Theseinstructionsask you to selectand delete , *rf
certaincell rangesin order to preservethe D20:E23calcu-
ot( Crt6l
lationsareacell range(which is not shownin FigureE9.2).
E9.3:UsinctheZTestfbr theProoortion 367

Levelof Significance,the Number of Successes, and the includes both the two-tail test and the upper- and lower-tail
SampleSize.Click one of the test options, enter a title as testson one worksheet.To adapt theseworksheetto other
theTitle,and click OK. problems,change(if necessary)the null hypothesis,level
o f s i g n i f i c a n c e , n u m b e r o f s u c c e s s e sa, n d s a m p l e s i z e
values in the tinted cells 84 through 88. To better under-
Z Proportion.xls
Using stand how messagesget displayed in these worksheets,
Youopenand use either the ZProp-TT or ZProp-All read the the IF Function" part of Section E9.l on
worksheets of theEEEEEEEEIEworkbook Io apply the Z p a g e3 6 4 .
testfor the proportion. These worksheetsuse the lf you want the ZProp-All worksheetto show only one
NORMSINV(P<X) function to determinethe lower and of the single-tail tests, first make a copy of that worksheet
upper criticalvaluesandtheNORMSDIST(Z value)func- (seethe Excel Companionto Chapter 1). For a lower-tail-
tionto compute thep-values. test-only worksheet, select and delete rows 25 through 28
TheZProp_TT worksheet(seeFigure9.15 on page and then select and delete rows 14 through 19. For an
355)applies thetwo-tailZtestrotheSection 9.5competrtive upper-tail-test-onlyworksheet,select and delete rows 14
example. TheZProp-All worksheet (seeFigureE9.3) throush 24.


-soRT(8r11 - 8CFB4
-{810 - B4yB1I

ng =NORfttSlNV{l .85,?}
*2' (1 . r'loRilSDlsT{ABs{812)}}
k- *lF{817 < 85, 'Tsjecl lhe null hypotlresi*",
'?o not feject the '|ull hypotbesis'J

*lF(822< 85,'?ejedthe null hyporhasls",
"Do nol rajecl lhe null hypcthesis'J
he -l{oRils|l{v{l - 85}
ox *1 - t{oRfrlsDrsT(B12}
*lF{827 < 85, "Rejesttbe null hypothesis".
he "0o not rejecl the null hypothesis"]