The sales of a grocery store had an average of $8,000 per day. The store introdu

Question

The sales of a grocery store had an average of $8,000 per day.
The store introduced several advertising campaigns in order to Increase sales. To
determine wherher or not the advertising campaignes have been effective in
increasing sales, a sample of 64 days of sales was selected. It was found that
the average was $8,250 per day. From past information, it is known that
the standard deviation of the population is $1,200.

1. Develope a hypothesis test.
2. Compute the value of the test statistic.
3.Compute the p-value
4.Using the critical value approach at 99% confidence, test the hypothesis.

Explanation / Answer

The test hypothesis is
Ho:<= 8000
Ha: > 8000

The test statistic is

Z=(xbar - )/(s/n)

=(8250-8000)/(1200/8)

= 1.67

The p-value is P(Z>1.67)= 0.0474 (check standard normal table)

Given a=0.01, since p-value is larger than a=0.01, we do not reject Ho.

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