Research Methodology For Management Decision

Research Paper

Presented to: Miss Fauzia Malik

Presented By: Ahmed Mahmood (BBA 7 FUIEMS)

Awais Abid (BBA 7 FUIEMS)
Mirza Daud Baig (BBA 7 FUIEMS)
 Research Methodology For Management Decision

1. Introduction.
In statistics, the Kolmogorov–Smirnov Test (K–S Test) is a
nonparametric test for the equality of continuous, one-dimensional
probability distributions that can be used to compare a sample with a
reference probability distribution (One-Sample K–S Test), or to compare
two samples (Two-Sample K–S test). The Kolmogorov–Smirnov statistic
quantifies a distance between the empirical distribution function of the
sample and the cumulative distribution function of the reference
distribution, or between the empirical distribution functions of two
samples. The null distribution of this statistic is calculated under the null
hypothesis that the samples are drawn from the same distribution (in the
two-sample case) or that the sample is drawn from the reference
distribution (in the one-sample case). In each case, the distributions
considered under the null hypothesis are continuous distributions but are
otherwise unrestricted. The Two-Sample K – S Test is one of the most
useful and general nonparametric methods for comparing two samples,
as it is sensitive to differences in both location and shape of the
empirical cumulative distribution functions of the two samples. The
Kolmogorov–Smirnov Test can be modified to serve as a goodness of fit
test. In the special case of testing for normality of the distribution,
samples are standardized and compared with a standard normal
distribution. This is equivalent to setting the mean and variance of the
reference distribution equal to the sample estimates, and it is known that
using these to define the specific reference distribution changes the null
distribution of the test statistic. Various studies have found that, even in
this corrected form, the test is less powerful for testing normality than the
Shapiro–Wilk test or Anderson–Darling test.

2. Overview of One-Sample Hypothesis Testing

a. In statistical terms, a hypothesis is a statement about a

population parameter and hypothesis testing is simply a test
of the statement about the population parameter. For
example, suppose that a new weight loss program claims
that participants lose at least 5 pounds by participating in the
program. In this example, the population is all of the
participants in the weight loss program and the population
parameter of interest is the population's mean or average
weight loss. "The mean weight loss of participants is greater
Research Methodology For Management Decision

than 5 pounds" is a hypothesis that can be tested using a

statistical analysis. Step-by-step instructions for performing
such a test are described in the following manner:-

b. Step-By-Step Instructions for Performing a One-Sample

Hypothesis Test

Refer to the Speedy Oil Change example discussed in the

Descriptive Statistics section. In the Speedy Oil Change
example, the oil change company claims that it will change
customer's oil in less than 30 minutes on average. However,
several complaints have been filed from customers stating
that their oil change took longer than 30 minutes and upper-
level management at Speedy Oil Change headquarters has
requested that you, the manager, investigate the
complaints. You have completed the Descriptive Statistics
analysis in Excel and are ready to further investigate the
validity of the customer complaints.

Step - 1. The first step is to state the hypothesis to be

tested, called the Null Hypothesis or Research Hypothesis,
and the Alternative Hypothesis. The null and alternative
hypotheses are denoted Ho and H1, respectively. If a claim
is being tested, as in this example, the claim is stated in the
alternative hypothesis. For this example, the null and
alternative hypotheses are:

Step - 2. Select the level of significance to be used in the

test. The level of significance is the probability of rejecting
the null hypothesis when it is true. Common significance
levels are .10, .05, and .01. Suppose you chose a .05 level
of significance, meaning there is a 5% chance that you will
reject the null hypothesis when it is true.
Research Methodology For Management Decision

Step - 3. Select the test statistic that is appropriate for this

test.

In general, you will need to decide between using a z test

statistic or a t test statistic. A z test statistic is based on the
normal distribution and the t test statistic is based on the t-
distribution. Your choice comes down to how large your
sample size is. Using the t distribution, you locate your
critical value based on the degrees of freedom (n-1 for a
one-sample test) and the significance level you chose in step
2 (see t table). When n > 30, it is acceptable to use the z
value. Why? Remember, as the sample size increases, all
sampling distributions converge towards the normal (z). This
is the Central Limit Theorem. The generally accepted rule of
thumb is that, when n > 30, any sampling distribution can be
assumed to be approximately normal. That is why you can
use the z values when n > 30. For proof of this, notice that
the critical ts, when df=infinity are exactly the same as the
critical z’s.

In the Speedy Oil Change example, the sample size is 36,

so it is acceptable to use a z test statistic.

The z test statistic for this example is shown below.

‘X’ is the population mean, s is the sample standard

deviation, and n is the number of observations in the sample.
Note that if you were performing a t test, you would use a
similar formula and proceed in the same manner:
Research Methodology For Management Decision

Step - 4. Determine the rejection region. The rejection

region defines the conditions under which the null hypothesis
is rejected. The rejection region depends on the alternative
hypothesis stated in Step 1 and the significance level chosen
in Step 2. In this example, the rejection region will be found
in the lower tail of the standard normal distribution. Why?
The rejection region for a one-tailed test can always be
located by looking at the direction of the inequality in the
alternative hypothesis. Since the alternative hypothesis
states μ < 30, the rejection region is in the lower tail of the
standard normal distribution. We use the standard normal
distribution in this case because we are using the z test
statistic which has a standard normal distribution. As stated
above, the rejection region also depends on the significance
level chosen in Step 2. In this example, a .05 significance
level indicates that the rejection region is defined by all the z
values that are less than -1.645, which is called the critical
value (notice that, if you had chosen to use the t-distribution
rather than the z, your critical values would have been
-1.69. As you can see, it makes no practical difference
whether you use the z or the t when you have large sample
sizes. The critical value is the dividing point between the
region where the null hypothesis is rejected and the region
where it is not rejected. This critical value is found by finding
the z value (from a standard normal table) that cuts off the
area equal to .05 in the lower tail of the standard normal
distribution.

Step - 5. Perform the hypothesis test. First, the z test

statistic needs to be calculated. The Speedy Oil Change
results from the Descriptive Statistics analysis are shown
below.
 Research Methodology For Management Decision

The Descriptive Statistics analysis results indicate that, we need

to compare the z test statistic of -3.5874 to the critical value of
-1.645. Because our test statistic is smaller than the critical value
and, therefore falls into the rejection region, we reject the null
hypothesis in favor of the alternative hypothesis.

c. Interpreting the Results of the Test

As the manager of Speedy Oil Change, you were asked to

investigate the customer complaints that oil changes at Speedy Oil
Change take more than 30 minutes on average. You formulated a
hypothesis, defined a significance level, determined the
appropriate test statistic and rejection region, and then performed
the hypothesis test. The results of the test indicate that the null
hypothesis should be rejected in favor of the alternative. The null
hypothesis is that the mean oil change time is more than 30
minutes. Because this hypothesis is rejected, you can report to
upper-level management that with 95% confidence
[100(1 - significance level)] the mean oil change time is less than
30 minutes.

3. One-Sample T-Test
It is perhaps easiest to demonstrate the ideas and methods of the one-
sample t-test by working through an example. To reiterate, the one-
sample t-test compares the mean score of a sample to a known value,
usually the population mean (the average for the outcome of some
population of interest). The basic idea of the test is a comparison of the
average of the sample (observed average) and the population
(expected average), with an adjustment for the number of cases in the
sample and the standard deviation of the average. Working through an
 Research Methodology For Management Decision

example can help to highlight the issues involved and demonstrate how
to conduct a t-test using actual data.

Example - Prenatal Care and

One of the best indicators of the health of a baby is his/her weight at

birth. is an outcome that is sensitive to the conditions in which mothers
experienced pregnancy, particularly to issues of deprivation and poor
diet, which are tied to lower. It is also an excellent predictor of some
difficulties that infants may experience in their first weeks of life. The
National Center for Health Statistics reports that although infants
weighing 5 1/2 pounds (88 ounces) or less account for only 7% of births,
they account for nearly 2/3 of infant deaths.

In the United States, mothers who live in poverty generally have babies
with lower birth weight than those who do not live in poverty. While the
average birth weight for babies born in the U.S. is approximately 3300
grams, the average birth weight for women living in poverty is 2800
grams.

Eliminating the linkage between poverty and low birth weight status has
been a prominent dimension of health policy for the past decade.
Recently, a local hospital introduced an innovative new prenatal care
program to reduce the number of low birth weight babies born in the
hospital. In the first year, 25 mothers, all of whom live in poverty,
participated in this program. Data drawn from hospital records reveals
that the babies born to these women had a birth weight of 3075 grams,
with a standard deviation of 500 grams.
 Research Methodology For Management Decision

The question posed to you, the researcher, is whether this program has
been effective at improving the birth weights of babies born to poor
women.

a. Establish Hypotheses

The first step to examining this question is to establish the

specific hypotheses we wish to examine. Recall from the unit
on hypothesis testing that most social science research
involves the development (based on theory) of a null hypothesis
and an alternative hypothesis - some test statistic is then
calculated to determine whether to reject the null hypothesis or
not.

For this example, what is the null hypothesis? What is the

alternative hypothesis?

In this case:

• Null hypothesis is that the difference between the

birth weights of babies born to mothers who
participated in the program and those born to other
poor mothers is 0. Another way of stating the null
hypothesis is that the difference between the
observed mean of birth weight for program babies
and the expected mean of birth weight for poor
women is zero.
• Alternative hypothesis - the difference between the
observed mean of birth weight for program babies
and the expected mean of birth weight for poor
women is not zero.
 Research Methodology For Management Decision

b. Calculate Test Statistic

Calculation of the test statistic requires four components:

(1) The average of the sample (observed average).

(2) The population average or other known value

(expected average)

(3) The standard deviation (SD) of the sample

average.

(4) The number of observations. With this example, the

components are as follows:-

(5) Sample average = 3075 grams

(6) Population average (poor women - remember we're

interested in whether this program improves birth
outcomes relative to those of poor women) = 2800
grams.

(7) SD of the sample average = 300 grams

(8) Number of observations = 25, with these four

pieces of information, we calculate the following
statistic, t:

In the case of our example,

Research Methodology For Management Decision

c. Use This Value To Determine P-Value

Having calculated the t-statistic, compare the t-value with a
standard table of t-values to determine whether the t-statistic
reaches the threshold of statistical significance. Plugging in
the values of t (.898) and n (number of cases = 25) yields a
p-value of .378. Generally speaking, we require p-values
of .05 or less in order to reject the null hypothesis. With a
value of .378, we cannot reject the null. Therefore, we
conclude that the intervention did not successfully improve
birthweight.

Extension Exercise

Although the prenatal care program appears to have been

successful in improving infants' birthweights significantly
above those of other mothers born to poverty, the question
remains whether the program alleviated the disadvantage
infants born to poorer women have in birthweight. The same
source tells us that the birthweight of all babies born in the
United States in X was 3,339 grams.
 Research Methodology For Management Decision

Are the birth weights of the babies born to the participants of the
prenatal care program significantly different from the average for the
overall national average?

To calculate a one-sample t-test, do the following steps:

a. Establish Hypotheses. Null hypothesis - difference between

observed and expected is 0
Alternative hypothesis - difference between observed and
expected is not 0.

b. Calculate Test Statistic. Calculation of the test statistic

requires four components:

• The average of the sample (observed average)

• The population average or other known value
(expected average)
• The standard deviation of the average
• The number of observations.

With these four pieces of information, we calculate the

following statistic, t:
 Research Methodology For Management Decision

c. Use This Value to Determine P-Value. Having calculated

the t-statistic, compare the t-value with a standard table of t-values
to determine whether the t-statistic reaches the threshold of
statistical significance.

T - Test for One Sample

Why is this Important?

Some times you have to decide if a sample mean is different from a

hypothesized population mean. You have calculated mean value and
standard deviation for the group assuming you have measurement data.
For example:

• You hear that the average person sleeps 8 hours a day. You think
college students sleep less. You ask 10 college kids how long they
sleep on an average day.
• You get the data and the mean of sleep time is 6.5 hours.
• Is this luck? Did you happen to pick a group of light sleepers by
chance? Or do college kids really sleep less?
• What you are asking is whether college kids come from a
population separate from the rest of society. "Society" supposedly
being all the people who contributed to the mean of 8 hours a night
that we hear about.

The Big Idea: Does Your Group Come from a Different Population
than the One Specified?
 Research Methodology For Management Decision

The problem is that if you calculate a sample mean and it is physically

different from the one hypothesized, there are two possible reasons for
the difference:

• Your sample comes from a different population and the sample

mean represents a different population mean. When this happens,
you reject the Null Hypothesis.

• The group comes from the same population and the mean varies
by chance. You just happened to pick a sample group with a
mean that misrepresents the population it came from. The group
isn't really different. When this happens you fail to reject the Null
Hypothesis - see the graphic on the next page.

The way to decide which is the case is with the one sample t-test.
You will compare the sample mean to the population mean and get an
estimate of the probability that the sample mean is different by chance.
How does the t-test work?

First, you will calculate the mean and standard deviation for your
group. A computer might actually do all of this for you.

Let me introduce some notation. The sample mean is usually noted as `

X . The population mean is noted as m. You are testing to see whether
or not ` X is different from m.

Next:

• You will use the t-test formula to compute the t-value.

• The t-score is like a z-score and tells you if the sample mean
is far away from the population mean (m). You will use the
sampling distribution of the mean to do this.
• If the t-value is big enough (you look it up in a t-table), you will
reject the Null Hypothesis and say you have a difference. If it is
not big enough you will say that you have not found a difference
and fail to reject the Null Hypothesis.

How does the t ratio do this?:

 Research Methodology For Management Decision

• The t-test sets up a sampling distribution of means with a mean

that is specified by the null hypothesis (m).

• The t-test calculates if your sample mean is far in the tails of the
sampling distribution and far away from the population mean (m).
• Thus, the difference may be too big to be chance. If your group
was really from the null hypothesis distribution, then the difference
should be close to zero.

• The t-score is made a relative score by dividing the difference

between the sample mean and m by the standard error of the
mean. See your book for the standard error formula.

• That's how we know if your sample mean is rare by chance as we

can calculate the areas in the tales (see the z-score workshop).

One-Sample t Test

We are going to use an example for the one sample t-test

about whether the academic staff at the UNE psychology
department publish differently than the national average of 8
publications per staff member between 1974 and 1996. A
random sample of size 5 was taken from the 17 members of
academic staff here at UNE. The data obtained were : 3, 21, 1,
15, and 7. The sample mean is = 9.4 and the sample
standard deviation, s, is 8.41. The question is whether this
sample mean of 9.4 gives us reason to believe that UNE
academic staff publish differently than the national average of
8. Descriptively it might seem so, but had a different random
sample of size 5 been collected, the sample mean would have
been different. What we need is a way of determining whether
the difference between 9.4 and 8 is a real difference or merely
an apparent difference. If it can be considered a real difference
we have evidence that to say that UNE academic staff have
published more than the national average of 8 publications
each. However, if the difference of 1.4 could easily be
explained as a chance fluctuation then we cannot say that
UNE staff publish more than the national average. The one-
 Research Methodology For Management Decision

sample t test gives us a way of answering that question.

The Data

Staff Publications
Member

1 7

2 3

3 44

4 4

5 21

6 11

7 10

8 3

9 0

10 6

11 0

12 1

13 2

14 15

15 15

16 0

17 28
 Research Methodology For Management Decision

µ 10

11.52

Figure 6.6 Data for one-sample t-test example.

First, we specify the null hypothesis to be tested: Ho: m = 8.

The alternative hypothesis is non-directional or "two-tailed": H1:
m 8. We've taken a random sample of size 5 from our
population (whose mean we are pretending for this example
we don't know) and computed the sample mean. Now, we ask
a simple question: What is the probability of getting a sample
mean of 9.4 or larger OR 6.6 or smaller if the population mean
is actually 8? Before I suggest a way of answering this
question, let me first talk about why we are interested in the
"6.6 or smaller."

The alternative hypothesis is phrased non-directionally or

"two-tailed." This means that we have no particular interest in
whether the actual population mean is larger or smaller than
the null hypothesised value of 8. What we are interested in is
how probable it is to get a sample mean that deviates 1.4 units
(from 9.4 minus 8) from the null hypothesised value of the
population. Because we have no interest in the direction of the
deviation, we consider 1.4 units in the opposite direction as
well. This is the nature of a non-directional hypothesis test. Of
interest is the probability of getting a deviation from the null
hypothesised population mean this large or larger, regardless
of the direction of the difference. In deciding whether or not the
data are consistent with the null hypothesis, we need to
consider sample mean deviations on either side of the null
hypothesised population mean. We call this a two-tailed test.
Had we phrased the alternative hypothesis directionally,
because we were interested in a particular direction of the
deviation, we'd conduct a one-tailed or directional test and
only consider deviations in that direction of interest when
computing the probability. For example, if we were interested
 Research Methodology For Management Decision

in the alternative that UNE staff publish more than the national
average, our alternative hypothesis would be H1: m > 8 and
we'd be interested only in the probability of getting a sample
mean of 9.4. We would ignore evidence in the other direction
even if the deviation in the other direction is substantial. The
issue of whether to use two-tailed tests or one-tailed tests is a
thorny one. Experts around the world cannot agree. For our
purposes, we will always be using two-tailed tests. In the
School of Psychology at UNE, two-tailed tests are the standard
approach even when the research hypotheses are phrased in
a directional manner.

Computing the Probability

We are now in a position to put an actual probability statement
on the obtained sample mean of 9.4. The question we need to
answer is whether a deviation of 1.4 in either direction from the
null hypothesis is a likely or an unlikely outcome if the null
hypothesis is true. One way of answering this question is to
first transform the obtained deviation to a test statistic called
the t statistic. The t statistic for the problem we are considering
is:

where m0 is the population mean under the null hypothesis (m0

= 8 in this case), s is the sample standard deviation (s = 8.41
in this case), and n is the sample size (n = 5 in this case).
Notice that the denominator of this formula is simply the
standard error of the sampling distribution of the sample
mean (the S.E.M.).

As you can see, this t statistic simply measures the obtained

difference between the sample mean and the null
hypothesised populations mean (9.4 minus 8) in terms of
standard errors from the null hypothesis. Plugging the relevant
information into the formula, t = 0.372. So, 9.4 is 0.372
 Research Methodology For Management Decision

standard error units from the null hypothesised value. This

statistic is important. Before using it further, let's discuss why
we need to do this conversion to a t statistic.

The reason why we do this conversion is because we need to

rely on a known sampling distribution in order to compute
the probability we need. In the case of testing a hypothesis
about a single population mean, we shall refer to a t
distribution, where the degrees of freedom is equal to n-1, or
one less than the sample size. Our sample size is 5, so our t
statistic is evaluated in reference to the t(4) distribution, or the t
distribution with 4 degrees of freedom.

Now that we have expressed our sample mean in terms of

standard error units from the null hypothesis, we can answer
the following question: What is the probability of getting a
sample mean 0.372 standard errors or more from the null
hypothesised value if the null hypothesis is true. Because we
are doing a two-tailed test, we are interested in 0.372 standard
errors in either direction from the null hypothesis (that is,
above or below 8). This is the original question we asked
except it had to be rephrased in terms of a t statistic rather
than in terms of the original sample mean.

There are two ways of deriving the answer to this question:

critical values, or p-values. Conceptually they are the same. I
will start with p values because they are more commonly used
and can be derived with a computer. So, from now on we will
only refer to computer printout.

Our problem is presented graphically in Figure 6.7. The curved

line represents the frequency distribution for the t statistic with
4 degrees of freedom. That is, this represents the relative
frequencies of the possible t values if the null hypothesis is
true. Notice that the t distribution is centred at 0, which is what
the t statistic would be if the sample mean exactly equalled the
population mean.

Call the total "area" under this curve and above the x-axis "1"
 Research Methodology For Management Decision

to denote the fact that the probability is 1 that you will get a t
statistic of some value. The obtained t of 0.372 is marked on
this figure. This value of t corresponds to a sample mean of
9.4. The hashed proportion of the area under the t distribution
to the right of 0.372 represents the probability of finding a t
statistic equal to or greater than 0.372 if the null hypothesis is
true, or of finding a mean of 9.4 or greater if the null hypothesis
is true. The -0.372 is also of interest because we are doing a
two-tailed test. We want to know the probability of getting a t
statistic as large or larger than 0.372, regardless of the
direction of the difference between the sample mean and the
null hypothesised value of the population mean. Notice that
-0.372 corresponds to a sample mean of 6.6 (you can verify if
you want by plugging 6.6 into the t statistic formula above).
The hashed area under the t distribution to the left of -0.372
represents the probability of finding a t statistic equal to or less
than -0.372 if the null hypothesis is true, or of finding a sample
mean of 6.6 or less if the null hypothesis is true.

Figure 6.7 The t-distribution with df = 4 and with t = +/- .372

marked.

What we want to derive is the sum of these two hashed

proportions. The sum of these proportions is the probability of
getting a difference of at least 1.4 (in either direction) between
the sample mean and the population mean if the null
hypothesis is true. The SPSS printout from this problem is
 Research Methodology For Management Decision

displayed in Output 6.3. With SPSS, the probability is

computed as .729. So the p value of the obtained result is .729
(or 72.9%). So the probability of finding a difference of at least
1.4 between the sample mean and null hypothesised value of
the population mean is 0.729 if the null hypothesis is true.

You can see that SPSS prints out all the information we could
have computed by hand, including the sample mean (Mean),
sample standard deviation, sample size. The standard error of
the sample mean (Std. of Mean), t statistic (under "t"), degrees
of freedom (df) and the all important p value are also printed.
The p value is listed under "Sig. (2-tailed)". In the present
example, the probability that a difference as large as the one
we have observed (or greater), given that the null hypothesis is
true, is equal to .729. Thus, it appears that what we have
observed is quite likely to occur if the null is true, and so we
have no grounds on which to reject Ho as a plausible
explanation of our data!

Output 6.3 Compare means � One-Sample T Test

First output is the result of taking a sample of size 5 from the

population specified in Figure 6.6 (also see notes) and
comparing it to the national average of 8.

T-Test
 Research Methodology For Management Decision

You can use the PROB20 program that was included with the
floppy disk that was sent to you to find p-values for t. It will
have installed to C:\202progs\prob20\Prob.exe, and you can
use File Manager (in Windows 3.1) or Explorer (in Win95) to
locate it. Double-clicking will bring up a DOS window with
PROB20 running. Use the space bar to shift between
distributions (Z, t, etc.) and tab to shift between windows. For
the preceding example, we see

Figure 6.8 The results of using the PROB20 program. A t

distribution with 4 degrees of freedom and a t-value of .37
gives the probability of that t-value or larger occurring. Note
how this program gives you the upper tail only. If you multiply .
3650701 by 2 (for the 2-tailed probability on the test above),
you obtain the "2-Tail Sig." from SPSS, about .73 (within
rounding).

Making the Decision

Now that we have the probability of the difference, given the
null hypothesis (p[D|H]), we are prepared to make a decision
about the population mean (that is, the entire department's
publication record) from information we've obtained from a
random sample of that population. We were interested in
testing the null hypothesis assumption that the mean number
of publications by UNE psychology department academics is
equal to the national average of 8. In a random sample of 5
members of the department, we found a mean of 9.4. We also
know that the probability of finding a difference this large or
larger in either direction of 8 is 0.729 (or 72.9%) when
randomly sampling 5 from this population if the null hypothesis
is true. Now what?

In this case, p is greater than .05. So we don't reject the null

hypothesis. The probability of .729 means that we'd expect to
 Research Methodology For Management Decision

find a sample mean that deviates at least 1.4 from the null
hypothesised value of 8 about 3 in 4 times (which is p = .75)
we take a random sample of size 5 from this population. The
obtained difference simply isn't sufficiently rare enough for us
to rule out "chance" or sampling error as the explanation for
the difference between the sample mean and the null
hypothesised value of the population mean of 8. So we
conclude that the psychology academics at UNE publish about
the same as the national average: 8 times per staff since 1974.
Had p been less than alpha (.05 here), we would have rejected
the null hypothesis. When the result leads us to reject the null
hypothesis, we claim the result is statistically significant.

Finally, two important points. First, notice that we

accomplished this inference relying only on information from
the sample � the sample mean, the sample standard
deviation, and the sample size � and with a little knowledge
about statistical theory and how "chance" influences the
sample mean. We didn't need to know anything about the
actual population. Second, many people think that if p<.05
then the probability that the null hypothesis is true is less than .
05. But this is not correct. The p value is the probability of the
obtained deviation or one more extreme occurring if the null
hypothesis is true. We actually can't compute the probability
that the null hypothesis is true without additional information.

One-tailed tests. In this example I've illustrated a two-tailed or

non-directional hypothesis test. We have all the information we
need in Output 6.2 had we conducted a one-tailed test. Notice
that the sampling distribution of t is symmetrical (see Figure
6.7). The hashed area to the right of 0.372 is equal to the area
to the left of -0.372. Because the p value is the sum of the
proportions representing these areas, it makes sense that a
one-tailed p value is derived by cutting the two-tailed p value in
half. So if the alternative hypothesis was H1: m > 8, the one-
tailed p value would be one half of 0.729 or about 0.365. This
is still above the .05 level adopted in the first place, so had we
conducted a one-tailed test, we still wouldn't reject the null
 Research Methodology For Management Decision

hypothesis.

Critical Values. Our decisions are based on p values � the

probability of the obtained difference between the sample
result (the mean in this case) and the null hypothesis (or one
more extreme) if the null hypothesis is true. Good statistical
analysis programs will provide the p value for a null hypothesis
test. Tables of critical t-values can also be obtained in most
statistics texts just like we did for correlation. These critical
values are sometimes important such as when constructing
confidence intervals. However, for our purposes they are rarely
necessary. So, we will not go through any further examples of
using tables of critical values..

Example 2

The five steps of hypothesis testing for the one sample t-test
will be briefly presented for the problem of determining if the
average number of publications for the entire staff at UNE
School of Psychology differ from the national average of 8.
That is, all 17 observations now form a sample instead of a
population.

Step 1: State hypotheses.

Ho: µ = 8.0

H1: µ 8.0

Note, the null hypothesis nominates a specific value. Often this

is zero, but it need not be. The alternative is a two-tailed test.
The alpha level required for significance is .05

Step 2: Check assumptions

The assumptions for the one-sample t-test are

Measurements are interval scale or better

 Research Methodology For Management Decision

Observations are independent of each other

The scores in the parent population are normally distributed.

Number of publications is a ratio variable. The observations

are probably not independent if some staff members have joint
publications. The distribution of scores also does not look very
normal! There are some very extreme scores. Given these
cautions about the assumptions being met, we will interpret the
final p-value cauriously.

Step 3: Calculate the test statistic

The second example compares the sample means of the 17

staff with the national average of 8.

Output 6.4 Compare means One-Sample T Test

Step 4: Evaluate the statistic

Here, we focus on the "Sig. (2-tailed)" value. This is .497.

Because it is not less than .05, we treat the result as not
significant. We therefore have no reason to reject the null
hypothesis. The summary statement is t(16) = .694, p > .05.
 Research Methodology For Management Decision

Step 5: Interpret the result

First, a statement such as

There was no significant difference between the average

number of publications by the staff at UNE from the national
average of 8 (t(16) = .694, p > .05).

Second, we interpret this as indicating that the staff at UNE

produce about the same number of publications as the
national average. So despite being considerably over worked,
we still manage to get enough papers out on average. Of
course, there is quite an amount of variation in the scores!

A Case Study: One Sample T- Test

The Situation
You have been asked to ensure that a recent process change has not
impacted a critical dimension of your flagship product. It is absolutely
critical that this critical dimension be equal to or greater than 26 mm.
Due to the level of importance we are only willing to risk being wrong 5%
of the time.
Collect Data
During the piloting phase, because we would never make a process
change without piloting it first, we collected 20 samples and measured
the critical dimension of each unit. A measurement system analysis had
recently been completed and we trust the measurement system is
repeatable and reproducible. Here is the data
Critical Dimension
26.0266
25.6270
25.7995
24.7843
23.9433
24.0123
24.0596
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24.1617
22.6681
25.8187
25.5415
24.6176
24.0489
25.8860
26.1441
23.8761
24.4975
24.1747
24.7755
23.1442
Check for Stability
Our next move is to check the stability of the data. We recently read on
an excellent lean six sigma blog that this was really important. So, we
took our data and entered it into Minitab, which is a standard off the
shelf statistical software package, and constructed an Individual’s Chart
(I Chart) as shown below:-
Observation Individual Value
1 3 5 7 9 11 13 15 17 19
27
26
25
24
23
22
X=24.680
UCL=27.004
LCL=22.357
I Chart of Critical Dimension
While there seems to be a fair bit of common cause variation in our
process it looks as though the data is relatively stable and no trends
appear to be developing. Next up we need to check out this funky thing
called normality. Scroll down for more fun sports fans.
Check for Normality
Our next move was to determine whether or not the data were normally
distributed. To do this we used Minitab to help us study the “descriptive
statistics” in a graphical manner as shown below.
 Research Methodology For Management Decision

23 24 25 26
Median
Mean
24.00 24.25 24.50 24.75 25.00 25.25 25.50
1st Quartile 24.021
Median 24.558
3rd Quartile 25.756
Maximum 26.144
24.212 25.148
24.051 25.607
0.761 1.461
A -Squared 0.57
P-Value 0.123
Mean 24.680
St Dev 1.000
Variance 1.000
Skewness -0.120643
Kurtosis -0.802125
N 20
Minimum 22.668
Anderson-Darling Normality Test
95% Confidence Interval for Mean
95% Confidence Interval for Median
95% Confidence Interval for St Dev
95% Confidence Intervals
Summary for Critical Dimension
Before looking at the numbers we looked at the shape of the distribution.
We noticed that it was not the prettiest bell curve we had ever seen but
also realized that with such as small sample size we may not want to
beat ourselves up too much. So, we took a look at the Anderson-Darling
Normality Test results in the top right hand corner. Our null hypothesis
(Ho) and alternate hypothesis (H1) for this normality test are as follows:
Ho: Data are normal
H1: Data are not normal
In this case, assuming an alpha risk of 0.05, we fail to reject our null
hypothesis and state our data are normal enough for what we want to
accomplish today! Had this P value been less than 0.05 we would have
rejected the null and stated the data do not appear normal enough for
 Research Methodology For Management Decision

us. But no worries we are ready to press on with our stable and normal
data.
Setup the One Sample T-Test
We are now ready to run the one sample t-test. In this situation we will
be stating our null and alternate hypothesis a bit differently so please
stay focused. If you remember back to our original objective we are only
concerned if our critical dimension is less than 26 mm. In other words,
we need our critical dimension to be equal to or greater than 26 mm. So
we set things up as follows.
Ho: mu > or = 26
H1: mu < 26
To accomplish this in Minitab we have forced the alternate hypothesis to
be less than by clicking the options button in the one sample t-test
window which then brings us to this window where we make the change.

References

• Business research Methods (FUIEMS).

• http:/ / www. mgmtpage.com
• http:/ / www.orestate.edu
• http:/ / Wikipedia.org
• www.isixsigma.com
• Lectures delivered by worthy tutors in the classes.