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5 percent of the households would purchase the brand then.

At a 2 percent significance level, should the company conclude that there is an increased interest in the extra-spicy flavor? Solution: N=6000 H0: p=0.05 H1: p>0.05 =0.02 The upper limit of the acceptance region is z=2.05, or p = pH0 + z((pH0*qH0)/n) = 0.05 + 2.05((0.05*0.95)/6000) = 0.05577 Because the observed z value = (p - pH0)/(pH0qH0/n) = (0.05583 0.05)/(0.05*0.95/6000) =2.07 >2.05 (or p>0.05577), we should reject H0. The current interest is significantly greater than the interest of 2 years ago.

Problem: Steve Cutter sells Big Blade lawn mowers in his hardware store, and he is interested in comparing the reliability of the mowers he sells with the reliability of Big Blade mowers sold nationwide. Steve knows that only 15 percent of all Big Blade mowers sold nationwide require repairs during the first year of ownership. A sample of 120 of Steves customers revealed that exactly 22 of them required mower repairs in the first year of ownership. At the 0.02 level of significance, is there evidence that Steves Big Blade mowers differ in reliability from those sold nationwide?

Solution: N=120 p = 22/120 = 0.1833 H0: p = 0.15 Problem: A ketchup manufacturer is in the process of deciding whether to promote a new extra-spicy brand. The companys marketing-research department used a national telephone survey of 6000 households and found that the extra spicy ketchup would be purchased by 335 of them. A much more extensive study made 2 years ago showed that)/(0.15*0.85/120) = 1.02 <2.33, we do not reject H0. Steves mowers are not significantly different in reliability from those sold nationwide.

Confidence Interval Single Population

Confidence Interval Two Population

Problem: A large hotel chain is trying to decide whether to convert more of its rooms to non-smoking rooms. In a random sample of 400 guests last year, 166 had requested non-smoking rooms. This year 205 guests in a sample of 380 preferred the non-smoking rooms. Would you recommend that the hotel chain convert more rooms to non-smoking? Support your recommendation by testing the appropriate hypothesis at 0.01 level of significance.

Solution: n1 = proportions of working mothers in the two areas of the city? Solution: n1 = 200 p1 = 0.52 n2 = 150 p2 = 0.40 H0: p1 = p2 H1: p1p2 = 0.04 p = (n1 p1 + n2 p2)/(n1+n2) = (200(0.52) + 150(.40))/(200+150) = 0.4686 Sigma
p1-p2 =

( p q(1/n1 + 1/n2)) = (0.4686(0.5314)((1/200 + 1/150))) = 0.0539

The lower limit of the acceptance region is z = 2.05, or p1 - p2 = 0 - z Sigma


p1-p2 =

2.05 (0.0539) = 0.1105


p1-p2) = (0.52

Because the observed z value = (p1 - p2)/( Sigma 0.0539 = 2.23

0.40) /

>2.05, we reject H0. The proportions of working mothers in the two areas differ significantly.

One Way Anova

Problem: A quality control supervisor for an automobile manufacturer is concerned with uniformity in the number of defects in cars coming off the assembly line. If one assembly line has significantly more variability in the number of defects, then changes have to be made. The supervisor has collected the following data: Number of Defects Assembly Line A Mean Variance Sample Size 10 9 20 Assembly Line B 11 25 16

Does Assembly line B have significantly more variability in the number of defects? Test at the 0.05 significance level.

Solution: H0: 400 p1 = 0.415 n2 = 380 p2 = 0.5395 H0: p1 = p2

H1: p1<p2 = 0.01 p = (n1 p1 + n2 p2)/(n1+n2) = (400(0.415) + 380(0.5395))/(400+380) = 0.4757 Sigma


p1-p2 =

( p q(1/n1 + 1/n2)) = (0.4757(0.5243)((1/400 + 1/380))) = 0.0358

The lower limit of the acceptance region is z = -2.33, or p1 - p2 = 0 - z Sigma


p1-p2 =

-2.33(0.0358) = -0.0834
p1-p2) = (0.415

Because the observed z value = (p1 - p2)/( Sigma 0.0358 = -3.48

0.5395) /

< - 2.33, we reject H0. The hotel chain should convert more rooms to non smoking because there was a significant increase in the proportion of guests requesting these rooms over the last year.

Problem: Two different areas of a large eastern city are being considered as sites for day care centres. Of 200 households surveyed in one section, the proportion in which mothers worked full time was 0.52. In another section, 40 percent of households surveyed had mothers working at full time jobs. At the 0.04 level of significance, is there a significant difference in the Thus we reject H0; assembly line B does have significantly more variability in the number of defects, so some changes have to be made.