Formulate both null and alternative hypotheses for the client, and explain why t
ID: 3067681 • Letter: F
Question
Formulate both null and alternative hypotheses for the client, and explain why the hypotheses need to be directional or non-directional. Also choose an alpha level (.05 recommended).
Determine what statistical test should be used to analyze the data.
Summarize all information used to determine the correct statistical test (e.g., number of groups, type of data collected, one or two samples, independent or repeated measures, etc.)
Provide a sample size and critical values in relation to the hypothesis. (Note: you can determine critical values just by knowing the number of groups and sample size).
State what statistical test should be used (be specific and provide a rationale for your decision).
Discuss what the statistical analysis will do in answering the hypotheses and question(s) for the client. Also discuss any potential problems to watch out for, including an appropriate sample size to meet the assumptions of the statistical test.
Sharron’s Hand Made Furniture
Sharron makes hand-made bedroom furniture, and will have a booth at the state fair. She will be selling furniture based on models shown at the fair. She is very excited about one new style of a bedroom suite (dresser-mirror, bed-frame, chest, 2 night stands) because it takes her half the time to make it compared to other styles. Not counting labor, it cost her 500 dollars to make this bedroom suite, and Sharron would like to sell the suite for 1,500 dollars. This is quite a bit of money, and so she would like to see if a selling trick would help her.
She wants to try two different selling tactics. First, sell it at 2,000 dollars, but then the salesman goes down to 1,500 after talking to the potential customer. The second approach would be to sell it at 2,000 dollars with a 25% “state fair” discount sign on the suite. Based on past experience, she can expect to sell an average 20 of these new bedroom suites a day at the state fair. Sharron will sell at the state fair for 16 days, and was thinking about using different selling tactics on different days (so alternate between the two tactics that way each tactic can be used for 8 days). As a statistical advisor, she would like your input into her plans on trying out different selling tactics, and help with analyzing the data.
Explanation / Answer
Sharron must use the below hypotheses:
Null Hypothesis : The profit earned by tactic one is less than or equal to the profit earned by tactic 2
Alternative hypothesis : The profit earned by tactic one is greater than the profit earned by tactic 2
These hypotheses need to be directional hypotheses.
The level of significance should be 0.05 or 5%
There are two groups as Tactic 1 and Tactic 2
The data collected is the sales by both the Tactics
There will be two samples one for each Tactic
The measurements will be independent.
The Independent Two-Sample T-test should be used to analyze the data.
The sample size for each tactic will be 8 and the critical value at 8+8-2=14 degrees of freedom will be 1.76.
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