A local insurance company is analyzing the cost of the two body shops their cust

Question

A local insurance company is analyzing the cost of the two body shops their customers tend to use in hopes to save money. They randomly select 10 bills from their files of claim payments made in the last year to see if one company tends to be cheaper than the other. The data are shown below. Mr. Fix It 1120 1660 2570 1700 3660 3970 Crash-tastic 980 1100 1450 2530 3090 3400 2190 4590 1050 1880 4030 1130 Part 1 of 2: 5 pts What inference procedure (test or interval BE SPECIFICI) would be appropriate to use to determine if there is a significant difference in repair costs. Explain why you made the choice you did! Part 2 of 2: 5 pts Check each appropriate condition in detail and indicate if you could proceed with the test. If you can proceed, write the hypothesis, then use technology to compute the test statistic (t or z score) and P- value. Give both values and your conclusion. If you cannot proceed, explain why, sighting the condition that wasn't met and why

Explanation / Answer

Part1:

Clearly, the question is about checking the difference not really constructing the confidence interval. So hypothesis testing is more appropriate here.

Part2:

This is 2 - independent sample 2-sided hypothesis test. Since n<30 so we can use t-test

H0: there is no significant difference between 2 samples

Ha: there is significant difference between 2 samples

using excel data anlysis add in we get:

p-value>.05; so cant reject H0; thus, no significant difference between 2 samples.

t-Test: Two-Sample Assuming Equal Variances Crash-tastic Mr Fix it Mean 2251 2456 Variance 1401721 1304849 Observations 10 10 Pooled Variance 1353285 Hypothesized Mean Difference 0 df 18 t Stat -0.39404 P(T<=t) one-tail 0.349089 t Critical one-tail 1.734064 P(T<=t) two-tail 0.698178 t Critical two-tail 2.100922

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