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Sheet 3 Quantitative Methods in Business BBST27I04

The document contains 4 problems involving hypothesis testing using z-tests. The problems test claims about averages of cases prepared by MBA students, long-distance phone bills, number of customers at a drive-up bank, and number of times alpine skiers ski in a year. For each problem, the null and alternative hypotheses are stated and the test statistic is calculated and compared to the critical value to determine whether to reject the null hypothesis or not at the given significance level, which ranges from 5% to 10%.

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35 views

Sheet 3 Quantitative Methods in Business BBST27I04

The document contains 4 problems involving hypothesis testing using z-tests. The problems test claims about averages of cases prepared by MBA students, long-distance phone bills, number of customers at a drive-up bank, and number of times alpine skiers ski in a year. For each problem, the null and alternative hypotheses are stated and the test statistic is calculated and compared to the critical value to determine whether to reject the null hypothesis or not at the given significance level, which ranges from 5% to 10%.

Uploaded by

Heba Kotb
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Sheet 3

Chapter 11

Quantitative methods in Business

BBST27I04

11.28 A business student claims that, on average, an MBA student is required to prepare more
than five cases per week. To examine the claim, a statistics professor asks a random sample of 10
MBA students to report the number of cases they prepare weekly. The results are exhibited here.
Can the professor conclude at the 5% significance level that the claim is true, assuming that the
number of cases is normally distributed with a standard deviation of 1.5?

2 7 4 8 9 5 11 3 7 4

Answer:

11.28

H0 :   5
H1 :   5
n

x i
2  7  4  8  9  5  11  3  7  4
x i 1
 6
n 10
x 65
z   2.11
 / n 1.5 / 10
z 0.05  1.645
As z  2.11  z 0.05  1.645

Reject H0 in favour of H1
11.38 Past experience indicates that the monthly long-distance telephone bill is normally
distributed with a mean of $17.85 and a standard deviation of $3.87. After an advertising
campaign aimed at increasing long-distance telephone usage, a random sample of 25 household
bills was taken and the sample mean was 19.13.

a. Do the data allow us to infer at the 10% significance level that the campaign was successful?

b. What assumption must you make to answer part (a)?

Answer:

z0.10  1.28
As z  1.65  z0.10  1.28

Reject H0 in favour of H1

11.42 For the past few years, the number of customers of a drive-up bank in New York has
averaged 20 per hour, with a standard deviation of 3 per hour. This year, another bank 1 mile
away opened a drive-up window. The manager of the first bank believes that this will result in a
decrease in the number of customers. The number of customers who arrived during 36 randomly
selected hours was recorded and the mean number of customers was 19.39 per hour. Can we
conclude at the 5% significance level that the manager is correct?

Answer:
 z0.05  1.645
As z  1.22   z0.05  1.645

Do not reject H0 in favour of H1

11.44 Many Alpine ski centres base their projections of revenues and profits on the assumption
that the average alpine skier skis four times per year. To investigate the validity of this
assumption, a random sample of 63 skiers is drawn and each is asked to report the number of
times he or she skied the previous year and the mean for this sample was 4.84. If we assume that
the standard deviation is 2, can we infer at the 10% significance level that the assumption is
wrong?

Answer:

Rejection region: Reject H0 if z  z or z   z


2 2

z  z0.05  1.645 and  z   z0.05  1.645


2 2

As z  3.33  z0.05  1.645

Reject H0 in favour of H1

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