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Chapter 9: Introduction to Hypothesis Testing

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396 CHAPTER 9 • INTRODUCTION TO HYPOTHESIS TESTING<br />

FIGURE 9.7B<br />

Minitab Output for<br />

Franklin Tire <strong>Hypothesis</strong><br />

Test Results<br />

p-value<br />

Test<br />

Statistic<br />

Minitab Instructions:<br />

1. Open file: Franklin.MTW.<br />

2. Choose Stat Basic Statistics <br />

1-sample t.<br />

3. In Samples in columns, enter data<br />

column.<br />

4. Select Perform hypothesis test and enter<br />

hypothesized mean.<br />

5. Select Options, in Confidence level insert<br />

confidence level.<br />

6. In Alternative, select hypothesis direction.<br />

7. Click OK.<br />

The sample mean, based on a sample of 100 tires is x 60.17 (60,170 miles), and<br />

the sample standard deviation is s 4.701 (4,701 miles). The t test statistics shown in<br />

Figure 9.7a and 9.7b are computed as follows:<br />

Because<br />

t 0.3616 < t 0.05<br />

1.6604, do not reject the null hypothesis.<br />

Thus, based upon the sample data, the evidence is insufficient <strong>to</strong> conclude that the new<br />

tires have an average life exceeding 60,000 miles. Based on this test, the company would<br />

not be justified in making the claim.<br />

Franklin managers could also use the p-value approach <strong>to</strong> test the null hypothesis<br />

because the output shown in Figures 9.7a and 9.7b provides the p-value. In this case, the<br />

p-value 0.3592. The decision rule for a test is<br />

Because<br />

x<br />

t <br />

60.<br />

17 60<br />

0.<br />

3616<br />

s 4.<br />

701<br />

n 100<br />

If p-value α reject H 0<br />

; otherwise, do not reject H 0<br />

.<br />

p-value 0.3592 0.05<br />

we do not reject the null hypothesis. This is the same conclusion we reached using the t test<br />

statistic approach.<br />

This section has introduced the basic concepts of hypothesis testing. There are several<br />

ways <strong>to</strong> test a null hypothesis. Each method will yield the same result; however, computer<br />

software such as Minitab and Excel show the p-values au<strong>to</strong>matically. Therefore, decision<br />

makers increasingly use the p-value approach.

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