Question

1. 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: Null Hypothesis: 3

HA: Alternative Hypothesis: 3

= Population SD =

n = Sample Size = 47

= Sample Mean = 3.1

SE = /

= 0.7071/

= 0.1031

Test Statistic is given by:
Z = (3.1 - 3)/0.1031

= 0.9695

Take = 0.05

From Table, critical value of Z = 1.645

Since calculated value of Z = 0.9695 is less than critical value of Z = 1.645, the difference is not significant. Fail to reject null hypothesis.

Conclusion:

The data do not support the claim that the average number of years of work experience of its MBA applicants is more than three years.