Testing Hypothesis: One-Sample

Tests
Richard I Levin and David S Rubin’s book on
Statistics for Management- Chapter 8
Contents
 Concepts basic to hypothesis-testing procedure
 Testing hypothesis
 Hypothesis testing of means when σ is known
 Measuring the Power of a hypothesis test
 Hypothesis testing of proportions: Large Samples
 Hypothesis testing of means when σ is not known
Example
 The roofing contract for a new sports complex in
Coimbatore has been awarded to L&T. Building specifications
call for a movable roof covered by approximately 10,000
sheets of 0.04 inch think aluminum. The aluminum sheets
cannot be appreciably thicker than 0.04 inch because the
structure could not support the additional weight. Nor can
the sheets be appreciably thinner than 0.04 inch because the
strength of the roof would be inadequate. Because of this
restriction on thickness, L&T carefully checks the aluminum
sheets from its suppliers. Of course, L&T does not want to
measure each sheet, so it randomly samples 100.
Example continued:
 The sheets in the sample have a mean thickness of 0.0408
inch. From past experience with this supplier, L&T believes
that these sheets come from a thinkness population with a
standard deviation of 0.004 inch. On the basis of these data,
L&T must decide whether the 10,000 sheets meet
specifications.
Example
 Building sports complex roof using aluminum
 Claimed average thickness = 0.04 inch (Population mean μ )
 Unsatisfactory if it is too thin or too thick
 Contractor takes sample of 100 sheets (sample size n)
 Determines the sample mean thickness = 0.0408 inch (x )
 Based on past experience population standard deviation =
0.004 inch (σ )
Q) Based on the sample can the 10,000 sheet shipment be
accepted by the contractor?
Example continued
Question being asked =>
 If μ = 0.04 inch and σ = 0.004 inch
 What is the probability that a random sample with a mean of
X  0.0408 inch will be selected from this population
 This probability will indicate whether it is reasonable to
observe a sample like this or not

 If the probability is too low then we must conclude that the

mean thinkness of the aluminum sheets is not 0.04 inch as
claimed by the aluminum company
Example continued
 Converting to Z value

x
z
x

where x 
n

Z = 2 standard error away from the mean

 Finding Probabilities Corresponding to Known Values

Hypothesized population mean μ = 0.04

Sample mean = 0.0408

95.5 % of area
 X  0.0004

2.28 % of area
2.28 % of area
under curve
under curve  2 X
 2 X

µ-3 µ-2 µ-1 µ µ+1 µ+2 µ+3

0.0392 0.0396 0.04 0.040 0.0408
-3 -2 -1 0 1 2 3 Z Scale
Example: continued
 From the table we get the Z value for 2 se = 0.4772

Q) What is the probability that the sample mean ≥ 0.0408?

 (0.5 – 0.4772) = 0.0228 or 2.28% on one side of the
distribution
Q) Symmetrically what is the probability that the sample mean
≤ 0.0392 ?
P(Z ≥ 2 or Z ≤ 2) = 2 x (0.5 – 0.4772) = 0.0456 or 4.56 %
Example conclusion

Ans) With this low %, contractor concludes that a population

with a true mean of 0.04 inch would not be likely to
produce a sample like this.
 Project supervisor rejects the aluminum company’s
statement about the mean thickness of the sheets
 Probability being low or high is subjective
Type I and Type II Error
 Here we rejected the contention that population mean is
0.04 inch-
 But what if the population mean = 0.04 inch ?
 With the rejection rule of 2 standard deviation we are
rejecting a good lot of aluminum sheets 4.56 % of the time.

 Probability of rejecting a true hypothesis = 4.56%

 Rejecting a true hypothesis is called Type I error
 Accepting a false hypothesis is called Type II error
 Level of significance = α = 4.56%