Question

A silicon-valley marketing guru employed by Apple Inc. takes a hit of LSD and hypothesizes that if the iPhone XS were placed under a blue light it will induce an unsuspecting customer to purchase it more often. Apple Inc., always trusting in the power of LSD to generate deeper insight into selling stuff, decides to act on this immediately. So, it selects a random sample of 225 stores where the iPhone 6 are placed under said blue light. It also deploys an army of Steve Jobs fanboys to collect data and calculate the average sales volume from stores with the new lighting. The data is as follows: In stores with the lighting, the average sales volume is $328,754 with a standard deviation of $227,000. The average sales volume per store, from previous data, was $300,000. Does this new sales strategy impact the buying habit of the customer in any way? Set up a hypothesis test of significance value 5% to test this. For this question enter your results in the Excel

Answer 1

Let X show the average sales volume in stores that have the new lighting. We know that the average sales volume from stores without the lighting is $300,000.

Our hypothesis then is as follows:

To test the hypothesis, we'll do a standard right-tailed t-test. Our t-statistic is:

Here, s shows the standard deviation of X and n is the sample size (225 here).

Using excel, you can find that the critical value at 5% level of significance (when degrees of freedom is 225) is 1.65.

If t>1.65, we reject the null hypothesis.

Now you just calculate.

You'll find that

Because t>1.65, you reject the null hypothesis.