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    Example 3:: Type Equation Here - N

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    qwerty
    The treasurer took a random sample of 70 employees and found the mean age to be 26.2 years with a standard deviation of 4.6 years. Using a two-tailed z-test at the 0.01 significance level, the treasurer calculated a z-score of 6.18. This exceeds the critical values of ±2.58, so the treasurer can conclude that the production manager's estimate of the mean employee age being 22.8 years is incorrect.

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    Example 3:: Type Equation Here - N

    Uploaded by

    qwerty
    618 views2 pages
    The treasurer took a random sample of 70 employees and found the mean age to be 26.2 years with a standard deviation of 4.6 years. Using a two-tailed z-test at the 0.01 significance level, the treasurer calculated a z-score of 6.18. This exceeds the critical values of ±2.58, so the treasurer can conclude that the production manager's estimate of the mean employee age being 22.8 years is incorrect.

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    Example-3

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    The treasurer took a random sample of 70 employees and found the mean age to be 26.2 years with a standard deviation of 4.6 years. Using a two-tailed z-test at the 0.01 significance level, the treasurer calculated a z-score of 6.18. This exceeds the critical values of ±2.58, so the treasurer can conclude that the production manager's estimate of the mean employee age being 22.8 years is incorrect.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    618 views2 pages

    Example 3:: Type Equation Here - N

    Uploaded by

    qwerty
    The treasurer took a random sample of 70 employees and found the mean age to be 26.2 years with a standard deviation of 4.6 years. Using a two-tailed z-test at the 0.01 significance level, the treasurer calculated a z-score of 6.18. This exceeds the critical values of ±2.58, so the treasurer can conclude that the production manager's estimate of the mean employee age being 22.8 years is incorrect.

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    Example 3:

    The production manager of a large manufacturing company estimates that the mean age of his employees is 22.8
    years. The treasurer of the firm needs a more accurate employee mean age figure in order to estimate the cost of
    an annuity benefit program being considered for employees. The treasurer takes a random sample of 70 workers
    and finds out that the mean age of the employees sampled is 26.2 years with a standard deviation of 4.6 years. At
    the 0.01 level of significance, what can the treasurer conclude about the accuracy of the production manager’s
    estimate?

    Solution:

    Step 1: H˳: The mean age of employees is 22.8 years (μ = 22.8)

    Hₐ: The mean age of employees is not 22.8 years (μ ≠ 90,000)

    Step 2: Type of test: two-tailed or nondirectional test.

    Critical value: With the use of Table 5.1, ɑ = 0.01, two-tailed test, the critical value is z = ± 2.58

    Rejection region:

    -2.58 2.58

    Step 3:
    Compute the test value, using the formula or test statistics.

    Given: x̅ = 26.2, μ = 22.8, n = 70, σ = 4.6

    Substitute the given values in the formula.

    The population standard deviation is not known but we can use the sample standard deviation (s) to replace the
    population standard deviation because the sample size is large (n > 30).

    Substitute the given values in the formula:

    Type equation here .z = (x̅ - μ) √ n


    σ 

    = (26.2- 22.8) √70

    4.6
    = 6.18
    Step 4: Decision: Since the computed or test value does not fall within the rejection region, we accept
    the null hypothesis.
    Step 5: Conclusion: There is no significant difference between the sample mean and the population
    mean. Thus, the treasurer of the firm can conclude that the manager is incorrect in his estimate that the
    mean age of the employees is 22.8 years.

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