H

0
: = < >
0
vs. H
A
: = > <
0

n = _______ o = _______
Testing a Hypothesis About a Mean;
Process Performance Measure is Approximately Normally Distributed or
We Have a small Sample;
We Do Not Know o Which Must be Estimated by S.
Therefore this is a t-test - Use Students T Distribution.
Calculate t
calc
= (X -
0
)/(s/ \ n )
DR: (= in H
A
) Reject H
0
in favor of H
A
if t
calc
< -t
o/2, n-1
or if t
calc
>
+t
o/2,n-1
. Otherwise, FTR H
0
.
DR: (> in H
A
) Reject H
0
in favor of H
A
iff t
calc
> +t
o, n-1
. Otherwise,
FTR H
0
.
DR: (< in H
A
) Reject H
0
in favor of H
A
iff t
calc
< -t
o
,
n-1
Otherwise,
FTR H
0
.
t-test ,To test one population mean
Degrees of Freedom
# in sample - number of parameters that must be
estimated before test statistic can be computed.
For a single sample t-test, we must first estimate the
mean before we can estimate the standard deviation.
Once the mean is estimated, n-1 of the values are left
since we know that the nth value is equal to

1
1
n
i
i
x
x n
Example

First Peoples Bank of Central City would like to improve
their loan application process. In particular currently the
amount of time required to process loan applications is
approximately normally distributed with a mean of 18 days.
Measures intended to simplify and speed the process have
been identified and implemented. Were they effective? Test
the appropriate hypothesis at the o = .05 level of significance
if a sample of 25 applications submitted after the measures
were implemented gave an average processing time of 15.2
days and a standard deviation of 2.0 days.
H
0
: > 18 H
A
: < 18
n = 25 o = .05
(i) testing a mean (ii) normal distribution (iii) o is
unknown and must be estimated so that this is a t-test
DR: Reject H
0

in favor of H
A
iff t
calc
< -1.711. Otherwise,
FTR H
0
t
calc
= (X -
0
)/(s / n) = (15.2 - 18)/ (2/ 25 ) = -2.8/.4
= -7.00
X Reject H
0
in favor of H
A
.
Example

The weight of a canned food product is specified as 500 grm. For
a sample of 8 cans the weight were observed as 480, 475, 510,
500, 505, 495, 504 and 515 grm. Test at 5% level of significance,
whether on an average the weight is as per specification.
Table value = 2.365
H
0
: 1 = < >
2
vs. H
A
: 1 = > <
2

n = _______ o = _______
Testing a Hypothesis About a Mean;
Process Performance Measure is Approximately Normally Distributed or
We Have a small Samples;
We Do Not Know o Which Must be Estimated by S.
Therefore this is a t-test - Use Students T Distribution.
Calculate (x
1
- x
2
) - (
1
-
2
)
t = -------------------------
s
*
( \ 1/n
1
+ 1/n
2
)

with d.f. = n
1
+ n
2
- 2. In this expression, s
*
is the pooled standard deviation,
given by
(n
1
1)s
1
2
+ (n
2
1)s
2
2

s
2





= ---------------------------------
n
1
+ n
2
- 2

t-test ,To test two population mean
DR: (= in H
A
) Reject H
0
in favor of H
A
if t
calc
< -t
o/2, n-1
or if t
calc
> +t
o/2,n-1
.
Otherwise, FTR H
0
.
DR: (> in H
A
) Reject H
0
in favor of H
A
iff t
calc
> +t
o, n-1
. Otherwise, FTR H
0
.
DR: (< in H
A
) Reject H
0
in favor of H
A
iff t
calc
< -t
o
,
n-1
Otherwise, FTR H
0
.
T- Test for Independent Samples - Two Cities
n
1
= 20 x
1
= 30 s
1
= 22
n
2
= 10 x
2
= 35 s
2
= 25

The degrees of freedom for the t-statistic are d.f. = 28

Critical value of t with 28 d.f for a tail probability of .025 is 2.05.

Decision rule : Reject H
0
if t < -2.05 or if t > 2.05." The pooled standard
deviation is
s
*
= \ 529 (approximately) = 23
The test statistic is t = -.56

Since t is neither less than -2.05 nor greater than 2.05, we cannot reject H
0

The sample evidence is not strong enough to conclude that the two cities differ in
terms of levels of exercising activity of their residents.

Cross-Tabulations:
Chi-square Test
Technique used for determining whether there is a
statistically significant relationship between two
categorical (nominal or ordinal) variables
Telecommunications Company
Marketing manager of a telecommunications company is reviewing
the results of a study of potential users of a new cell phone
Random sample of 200 respondents
A cross-tabulation of data on whether target consumers would buy the
phone (Yes or No) and whether the cell phone had Bluetooth wireless
technology (Yes or No)
Question
Can the marketing manager infer that an association exists between
Bluetooth technology and buying the cell phone?
Two-Way Tabulation of Bluetooth Technology
and Whether Customers Would Buy Cell Phone
Cross Tabulations -Hypotheses
H
0
: There is no association between wireless technology
and buying the cell phone (the two variables are
independent of each other).

H
a
: There is some association between the Bluetooth feature
and buying the cell phone (the two variables are not
independent of each other).
Conducting the Test
Test involves comparing the actual, or observed, cell
frequencies in the cross-tabulation with a
corresponding set of expected cell frequencies (E
ij
)
Expected Values
n
i
n
j

E
ij
= -----
n

Where n
i
and n
j
are the marginal frequencies, that is, the total
number of sample units in category i of the row variable and
category j of the column variable, respectively
Computing Expected Values
The expected frequency for the first-row, first-column
cell is given by
100 100
E
11
= ------------ = 50
200
Observed and Expected Cell Frequencies
Chi-square Test Statistic
r c (O
ij
- E
ij
)
2

_
2
= E E -----------------
i=1 j=1 E
ij

= 72.00
Where r and c are the number of rows and columns, respectively,
in the contingency table. The number of degrees of freedom
associated with this chi-square statistic are given by the product (r
- 1)(c - 1).
Chi-square Test Statistic in a Contingency Test
For d.f. = 1, Assuming o =.05, from Appendix 2, the critical
chi-square value (_
2
c
) = 3.84.

Decision rule is: Reject H
0
if _
2
> 3.84.

Computed _
2
= 72.00
Since the computed Chi-square value is greater than the critical
value of 3.84, reject H
0.
The apparent relationship between Bluetooth technology"and
"would buy the cellular phone" revealed by the sample data is
unlikely to have occurred because of chance
In a management institute, the A+, A and B grades
allocated to students in there final examination, were as
follows. Using 5% level of significance, determine
whether the grading scale is independent of the
specialization.
Table value = 9.488
Specialization
Grade Finance Marketing Operations

A+ 20 15 05
A 25 20 15
B 10 08 07