Question

Suppose a new production method will be implemented if a hypothesis test supports the conclusion that the new method reduces the mean operating cost per hour.

a. State the appropriate null and alternative hypotheses if the mean cost for the current production method is $240 per hour.

H₀: ? _________ 240

H_a: ? _________ 240

b. What is the Type I error in this situation? What are the consequences of making this error?

Claiming ?______240 when the new method ________lower costs. A mistake could be implementing the method when it _________help.

c. What is the Type II error in this situation? What are the consequences of making this error?

Claiming  ?________240 when the new method_________ lower costs. This could lead to not implementing a method that___________ lower costs.

Answer 1

a)

null hypothesis:Ho		μ	=	240
Alternate Hypothesis:Ha		μ	<	240

b)

Claiming μ <240 when the new method does not lower costs. A mistake could be implementing the method when it does not help

c)

Claiming μ =240 when the new method does lower costs. This could lead to not implementing a method that could lower costs.