Question

Because of high production-changeover time and costs, a director of manufacturing must convince management that a proposed manufacturing method reduces costs before the new method can be implemented. The current production method operates with a mean cost of $260 per hour. A research study will measure the cost of the new method over a sample production period. (a) Develop the null and alternative hypotheses most appropriate for this study. Ho 260 Ha 260 Ho 260 H 260 Ho 260 H3 us 260 Ho u 260 Ha u 260 Ho u260 Ha uz 260 (b) Comment on the conclusion when H cannot be rejected. OThere is not enough evidence to conclude that the new method reduces costs. Management should not consider implementing the new method. There is enough evidence to conclude that the new method reduces costs. Management should not consider implementing the new method. There is not enough evidence to conclude that the new method reduces costs. Management should consider implementing the new method. There is enough evidence to conclude that the new method reduces costs. Management should consider implementing the new method. (c) Comment on the conclusion when H can be rejected There is not enough evidence to conclude that the new method reduces costs. Management should not consider implementing the new method. There is enough evidence to conclude that the new method reduces costs. Management should not consider implementing the new method. There is not enough evidence to conclude that the new method reduces costs. Management should consider implementing the new method. There is enough evidence to conclude that the new method reduces costs. Management should consider implementing the new method.

Answer 1

Solution:

This is a two tailed test.

a)

The null and alternative hypothesis is,

Ho: $\mu$ $=$ 260

Ha: $\mu$ $\neq$ 260

b)

Therefore, There is enough evidence to conclude that the new method reduces costs . Management should implementing the new method.