Manufactured items usually come with a guarantee. The warranty is sometimes word

Question

Manufactured items usually come with a guarantee. The warranty is sometimes worded in a way that the consumer can apply a prorated portion of the original purchase price towards another product from the same manufacturer. Under these conditions one marketing strategy is to produce items that have a life expectancy shorter than the warranty period. To investigate such a possibility, a study was conducted in which the life times of vacuum cleaners were recorded that had an original 36 months warranty. The recorded times were 27, 44, 19, 36, 23 months

Explanation / Answer

here we use one sample t-test with

null hypothesis H0:mu=36 and

alternate hypothesis Ha:mu and

statistic t=(x--mu)/(s/sqrt(n))=(29.8-36)/sqrt(10.13/sqrt(5))=-2.913 with n-1=5-1=4 df

the critical t(0.05,4)= 2.78 is less than absolute value of calculated t=2.913, so we fail to accept H0 and conclude that marketing strategy is to produce items that have a life expectancy shorter than the warranty period.

following information has been generated using ms-excel

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