SOLUTION: An engineering firm is evaluating their back charges. They originally believed their average back charge was $1800. They are concerned that the true average is higher, which coul

Question 359895: An engineering firm is evaluating their back charges. They originally believed their average back charge was $1800. They are concerned that the true average is higher, which could hurt their quarterly earnings. They randomly select 40 customers, and calculate the corresponding sample mean back charge to be $1950. If the standard deviation of back charges is $500, and alpha = 0.05, should the engineering firm be concerned? Perform an appropriate hypothesis test, showing the necessary calculations and/or explaining the process used to obtain the results
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
An engineering firm is evaluating their back charges. They originally believed their average back charge was $1800. They are concerned that the true average is higher, which could hurt their quarterly earnings. They randomly select 40 customers, and calculate the corresponding sample mean back charge to be $1950. If the standard deviation of back charges is $500, and alpha = 0.05, should the engineering firm be concerned? Perform an appropriate hypothesis test, showing the necessary calculations and/or explaining the process used to obtain the results
---------------------------------
Ho: u = 1800
Ha: u > 1800
----
t(1950) = (1950-1800)/[500/sqrt(40)] = 1.8974
---
p-value: P(t > 1.8974 when df = 39) = tcdf(1.8974,100,39) = 0.0326
---
Conclusion: Since the p-value is less than 5%, reject Ho.
The test results do not support the claim that u = 1800.
==================================
Cheers,
Stan H.
RELATED QUESTIONS
An engineering firm is evaluating their back charges. They originally believed their... (answered by stanbon)

Joe and Ann rode their bike 6 miles uphill at a rate of 10 miles per hour. they rode back (answered by macston)

The Jones family decided to leave their home in Vermont and go on vacation. They loaded... (answered by solver91311)

What was their average speed? Two youngsters were running as hard as they could. They... (answered by Alan3354,Theo)

At the same time, but different speed, Mark and Nancy left (driving) from different... (answered by ankor@dixie-net.com,josmiceli)

Two friends go for a Sunday jog. During the first part of their jog, they average 6 miles (answered by josgarithmetic)

A kayak wint up a river and back in 6 hours. If their rate up the river was 2 miles per... (answered by Mogana,JDorrin)

Jack and Jill walked along a level road, up the hill, back (along the same path) down the (answered by Alan3354,fractalier)

The Warren's backyard is 50 foot by 50 foot square. They have attached a 8-foot chain to (answered by josmiceli)