SOLUTION: A manufacturer contemplating the purchase of new tool making equipment has specified that on the average the equipment should not require more than <u>10 minutes</u> of set up time

Question 927434: A manufacturer contemplating the purchase of new tool making equipment has specified that on the average the equipment should not require more than 10 minutes of set up time per hour of operation. The purchasing agent visits a company where the equipment being considered is installed; from records there he notes that 40 randomly selected hours of operation included a total of 7 hours and 30 minutes of set up time, and the standard deviation of set up time per hour was 3 minutes. Based on this sample result, can the assumption that the equipment meets the set up time specification be rejected at the 1 percent level of significance?
Answer by ewatrrr(24785) (Show Source): You can put this solution on YOUR website!
set up time specification: t ≤ 10min
Sample: mean = 450min/40 = 11.25min, sd = 3min

z(11.25) = 1.25/(3/sqrt(40) = 2.6352
P(z > 2.6352) = .0042
........
1 percent level of significance
.0042< .01, equipment does NOT meet the set up time specification
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