OPRE 506

Homework # 2

Problems from the Statistics for Managers Textbook

1. The quality-control manager at a compact fluorescent light bulb (CFL) factory needs to determine
whether the mean life of a large shipment of CFL is equal to 7,500 hours. The population standard
deviation is 1,000 hours. A random sample of 64 CFLs indicates a sample mean life of 7,250 hours.

a. At the 0.05 level of significance, is there evidence that the mean life is different from 7,500 hours?

Reject the null hypothesis

Z Test for the Mean

Data
Null Hypothesis m
= 7500
Level of Significance 0.05
Population Standard Deviation 1000
Sample Size 64
Sample Mean 7250

Intermediate Calculations
Standard Error of the Mean 125
Z Test Statistic -2

Two-Tail Test  
Lower Critical Value -1.9600
Upper Critical Value 1.9600
p-Value 0.0455
Reject the null hypothesis  

b. Compute the p-value and interpret its meaning.

p-Value 0.0455

c. Construct a 95% confidence interval estimate of the population mean life of the CFLs.

Its between lower limit 7005.0045 and upper limit 7494.9955

Confidence Estimate for the Mean

 Data  
Population Standard Deviation 1000
Sample Mean 7250
Sample Size 64
Confidence Level 95%

Intermediate Calculations
Standard Error of the Mean 125
Z Value -1.9600
Interval Half Width 244.9955

Confidence Interval
7005.004
Interval Lower Limit 5
7494.995
Interval Upper Limit 5

d. Compare the results of (a) and (c). What conclusions do you reach?

Since we are rejecting our mean = 7500 in part (A) in part (C) the mean full between

Confidence Interval
7005.004
Interval Lower Limit 5
7494.995
Interval Upper Limit 5

2. The worldwide market share for the Chrome web browser was 26% in a recent month. (Data
extracted from netmarketshare.com) Suppose that you decide to select a sample of 100 students at
your university and you find that 30 use the Chrome web browser.

a. Use the five-step p-value approach to determine whether there is evidence that the market share for
the Chrome web browser at your university is greater than the worldwide market share of 26%. (Use the
0.05 level of significance.)

Z Test of Hypothesis for the Proportion

Data
Null Hypothesis p= 0.26
Level of Significance 0.05
Number of Items of Interest 30
Sample Size 100
 Intermediate Calculations
Sample Proportion 0.3000
Standard Error 0.0439
Z Test Statistic 0.9119

Two-Tail Test
-
Lower Critical Value 1.9600
Upper Critical value 1.9600
p-Value 0.3618
Do not reject the null hypothesis  

b. Suppose that the sample size is n = 400, and you find that 30% of the sample of students at your
university (120 out of 400) use the Chrome web browser. Use the five-step p-value approach to try to
determine whether there is evidence that the market share for the Chrome web browser at your
university is greater than the worldwide share of 26%. (Use the 0.05 level of significance.)

Z Test of Hypothesis for the Proportion

Data
Null Hypothesis p= 0.26
Level of Significance 0.05
Number of Items of Interest 120
Sample Size 400

Intermediate Calculations
Sample Proportion 0.3000
Standard Error 0.0219
Z Test Statistic 1.8238

Two-Tail Test
-
Lower Critical Value 1.9600
Upper Critical value 1.9600
p-Value 0.0682
Do not reject the null hypothesis  

c. Discuss the effect that sample size has on hypothesis testing.

When you increase the sample size the hypothesis more likely to reject the null hypothesis when it is,
in fact, false.
d. What do you think are your chances of rejecting any null hypothesis concerning a population
proportion if a sample size of n =20 is used?

The likelihood of rejecting the null hypothesis with sample size 20 is relatively (low, high) because
(sample proportion decreases ,test statistic increases, test statistic decreases, sample proportion
increases) as n decreases.

3. As a member of the international strategic management team in your company, you are assigned the
task of exploring potential foreign market entry. As part of your initial investigation, you want to know if
there is a difference between developed markets and emerging markets with respect to the time
required to start a business. You selected 15 developed countries and 15 emerging countries. The time
required to start a business, defined as the number of days needed to complete the procedures to
legally operate a business in these countries, is stored in the ForeignMarket file that is attached to the
assignment.

a. Assuming that the population variances for developed countries and emerging countries are equal, is
there evidence of a difference in the mean time required to start a business between developed
countries and emerging countries? (uses alpha = 0.05)

Since the P value is smaller than .05 we are rejecting our null hypothesis so there is enough evidence of
different in the mean required time to start a business.

Pooled-Variance t Test for Differences in Two Means

(assumes equal population variances)
Data
Hypothesized Difference 0
Level of Significance 0.05
Population 1 Sample  
Sample Size 15
9.1199999
Sample Mean 8
Sample Standard Deviation 5.7476
Population 2 Sample  
Sample Size 15
21.693333
Sample Mean 2
Sample Standard Deviation 21.5711

Intermediate Calculations
Population 1 Sample Degrees of Freedom 14
Population 2 Sample Degrees of Freedom 14
Total Degrees of Freedom 28
Pooled Variance 249.1726
 Standard Error 5.7639
Difference in Sample Means -12.573333
t Test Statistic -2.1814

Two-Tail Test  
Lower Critical Value -2.0484
Upper Critical Value 2.0484
p-Value 0.0377
Reject the null hypothesis  

b. Determine the p-value in (a) and interpret its meaning.

The probability of attaining sample that yield a t-statistic forther away from zero in either direction is .
0377

p-Value 0.0377

c. In addition to equal variances, what other assumption is necessary in (a)?

The sample size is 15 which is <than 30 this is normal distribution.

d. Construct a 95% confidence interval estimate of the difference between the population means of
developed countries and emerging countries.

Its between these two lower limit -24.3802 and upper limit -0.7664

Confidence Interval Estimate

for the Difference Between Two Means
   
Data
Confidence Level 95%
   
Intermediate Calculations
Degrees of Freedom 28
t Value 2.0484
Interval Half Width 11.8069
   
Confidence Interval
Interval Lower Limit -24.3802
Interval Upper Limit -0.7664
4. Does the quality of cell service vary between providers? The file CellService provides the cellphone
rating of AT&T and Verizon Wireless in 23 U.S. cities. (Data extracted from “Smart-Phone Shopping
Guide,” Consumer Reports, January 2014, pp 30-31.)

a. At the 0.05 level of significance, is there evidence of difference in mean cell service rating between
AT&T and Verizon Wireless?

We have evidence to reject that the means are the same.

Paired t Test

Data
Hypothesized Mean Diff. 0
Level of Significance 0.05

Intermediate Calculations
Sample Size 23
DBar -5.8125
degrees of freedom 22
SD 3.1220
Standard Error 0.6510
t Test Statistic -8.9287

Two-Tailed Test
Lower Critical Value -2.0739
Upper Critical Value 2.0739
p-Value 0.0000
Reject the null hypothesis

b. What assumption about the cellphone rating is necessary to perform this test?

Its 23 cities so its normal distribution.

c. Use a graphical method to evaluate the assumption made in (a).

By using the Boxplot:its right skewed.

d. Construct and interpret a 95% confidence interval estimate of the difference in the mean cell service
between AT&T and Verizon Wireless

So we are 95% sure that our services range full between lower limit -7.0884 and upper limit -4.5366

Confidence Estimate for the Mean

Data  
3.12204
Population Standard Deviation 4
Sample Mean -5.8125
Sample Size 23
Confidence Level 95%

Intermediate Calculations
0.65099
Standard Error of the Mean 1
Z Value -1.9600
Interval Half Width 1.2759

Confidence Interval
Interval Lower Limit -7.0884
Interval Upper Limit -4.5366