Question

A company is trying out a new marketing plan and wishes to evaluate its success.                                                                      

    Prior to the new advertising scheme, the average per store sales were $150,000 per

    month. The new method is tried and a random sample of 100 stores is studied. The

    standard deviation for monthly sales was known from previous studies to be $13,500

    weekly. The sample average was measured to be $152,000.

Use α = .05 to decide if the new method increases sales or not.

Answer 1

Solution :

This is the right tailed test .

The null and alternative hypothesis is ,

H₀ :   = 150000

H_a : > 150000

Test statistic = z

= ( - ) / / n

= (152000 - 150000) / 13500 / 100

Test statistic = 1.48  

P(z > 1.48) = 1 - P(z < 1.48) = 0.0694

P-value = 0.0694

= 0.05

P-value >

Fail to reject the null hypothesis .

There is not sufficient evidence at  α = 0.05 to decide if the new method increases sales or not.