SOLUTION: Assume you are the manager of a paint manufacturing factory. Your company has received complaints from customers that the containers hold less than the amount printed on them.

Question 627984:
Assume you are the manager of a paint manufacturing factory. Your company has received complaints from customers that the containers hold less than the amount printed on them. On the other hand, corporate management is concerned that the containers hold more than the standard amount. You assign a statistician to verify these claims. A sample of containers was selected and the volume of paint in each container was measured. Assuming that the volume printed on each container is 1 gallon, how would you formulate the null and alternative hypotheses to test the customers� claim? As a manager, what reasonable criteria will you use to set a value for the level of significance to be used in the test? After answering this question, what type of error would you suppose may result in that case?
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
Assume you are the manager of a paint manufacturing factory. Your company has received complaints from customers that the containers hold less than the amount printed on them. On the other hand, corporate management is concerned that the containers hold more than the standard amount. You assign a statistician to verify these claims. A sample of containers was selected and the volume of paint in each container was measured. Assuming that the volume printed on each container is 1 gallon, how would you formulate the null and alternative hypotheses to test the customers� claim? As a manager, what reasonable criteria will you use to set a value for the level of significance to be used in the test? After answering this question, what type of error would you suppose may result in that case?
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Ho: u = 1 gallon
Ha: u < 1 gallon (claim)
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alpha = 5% might be a reasonable level of significance.
There will be a 5% chance of a Type I error.
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Cheers,
Stan H.
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