Question

A business school has a goal that the average number of years of work experience of its MBA applicants is more than three years. Historical data suggest that the variance has been constant at around six months, and thus, the population variance can be assumed to be known. Based on last year’s applicants, it was found that among a sample of 47, the average number of years of work experience is 3.1. Can the school state emphatically that it is meeting its goal? Formulate the appropriate hypothesis test and conduct the test.

Answer 1

H0: = 3.1

Ha: > 3.1

Test statistics

z = ( - ) / sqrt [ / n ]

= ( 3.1 - 3) / sqrt ( 0.5 / 47)

= 0.97

Critical value at 0.05 significance level = 1.645

Since test statistics < 1.645 , do not reject H0.

We conclude at 0.05 significance level that we fail to support the claim that the average number of years of work

experience of its MBA applicants is more than 3 years.