Question

A steel company is considering the relocation of one of its manufacturing plants. The company’s executives have selected four areas that they believe are suitable locations. However, they want to determine if the average wages are significantly different in any of the locations, since this could have a major impact on the cost of production. A survey of hourly wages of similar workers in each of the four areas is performed with the following results. Do the data indicate a significant difference among the average hourly wages in the three areas?

Hourly Wages ($)

Area 1	Area 2	Area 3
15	18	15
13	15	10
13	14	15
12	16	13
9	20	15
16	14	18
13	21	19
13	17	22

Step 1 of 2:

Find the value of the test statistic to test for a difference in the areas. Round your answer to two decimal places, if necessary.

Step 2 of 2:

Make the decision to reject or fail to reject the null hypothesis of equal average hourly wages in the three areas and state the conclusion in terms of the original problem. Use α=0.01α=0.01.

Answer 1

NULL HYPOTHESIS H0:

ALTERNATIVE HYPOTHESIS Ha: All means are different.

alpha=0.01

test statistic F= 3.868

P value =0.037

Since P value is GREATER than the level of significance therefore NOT SIGNIFICANT.

Decision: DO NOT REJECT H0.

Conclusion: We don't have sufficient evidence to conclude that there is difference in means.