A large software development firm recently relocated its facilities. Top managem

Question

A large software development firm recently relocated its facilities. Top management is interested in fostering good relations with their new local community and has encouraged their professional employees to engage in local service activities. They believe that the firm's professionals volunteer an average of more than 15 hours per month. If this is not the case, they will institute an incentive program to increase community involvement. Based on data collected they perform the appropriate hypothesis test. A Type II error in this context means

I. they failed to detect that the average number of hours volunteered by the firm’s professional employees is more than 15 hours when in fact it is.
II. they would decide not to institute an incentive program to increase community involvement when they should have.
III. they would waste money instituting an incentive program to increase community involvement among its professional employees that was not needed.

I and II only

III only

II only

I and III only

I only

I and II only

III only

II only

I and III only

I only

Explanation / Answer

Ans:

Null hypothesis:

Average number of hours volunteered by the firm’s professional employees is less than equal to15 hours.

Alternative hypothesis:

Average number of hours volunteered by the firm’s professional employees is more than 15 hours.

We make Type II error,when we fail to reject the null hypothesis and null hypothesis is false.

So,option I is correct(as we fail to reject the null hypothesis i.e. we did not accept the alternative hypothesis,when it is in fact true)

Also,option III is correct,as they would waste money instituting an incentive program to increase community involvement among its professional employees that was not needed(as they have accepted null hypothesis i.e. less than equal to 15 hrs,so they would decide to implement incentive program to increase the community involvement,but it is not required actually,as in fact community involvement is already greater than 15 hrs)

So,correct option is I and III only.

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