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Hypothesis Testing in Business Statistics

This document discusses hypothesis testing tools used in business statistics. It provides an example of performing a z-test to determine if the average daily ATM withdrawal of P188,000 is different from the observed daily withdrawal amount of P193,000. The null hypothesis that the average is P188,000 is rejected because the calculated z-score of 2.77 is greater than the critical value of 1.96. The recommendation is for the bank manager to load more money in the ATM to avoid it running out of cash based on the higher observed average withdrawal amount.

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CARL JAMES
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29 views10 pages

Hypothesis Testing in Business Statistics

This document discusses hypothesis testing tools used in business statistics. It provides an example of performing a z-test to determine if the average daily ATM withdrawal of P188,000 is different from the observed daily withdrawal amount of P193,000. The null hypothesis that the average is P188,000 is rejected because the calculated z-score of 2.77 is greater than the critical value of 1.96. The recommendation is for the bank manager to load more money in the ATM to avoid it running out of cash based on the higher observed average withdrawal amount.

Uploaded by

CARL JAMES
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

BUSINESS STATISTICS

Module 4. Hypothesis Testing Tools

• Hypothesis
• Hypothesis testing
• Inferential statistics
• Parametric statistics
• Nonparametric statistics
• Two hypothesis
• Null hypothesis
• Alternative hypothesis
• Test of difference
• Test of relationship
• One tail hypothesis
• Two tail hypothesis
• Type 1 error
• Type 2 error
• Level of significance
• Confidence level
• Rejection regions
• Non-rejection regions
• One sample test (z-test and t-test)
• Z-test (population standard deviation is
known
• Z = (xbar - ɥ)
δ _
n
The manager of a certain bank regularly monitors the ATM and
stocks with sufficient money so clients can withdraw money
particularly during weekends. He would want to make sure
that the ATM will not run out of cash to meets the clients’ daily
withdrawal needs. Based on bank records, the average daily
withdrawal of clients is P188,000 with standard deviation of
P9,875. For 30 days, he observed the daily ATM withdrawals,
which was noted at P193,000. At a .05 level of significance, is
the daily ATM withdrawals different from P188,000?
Null hypothesis: The average daily ATM
withdrawals is P188,000.
Alternative hypothesis: The average daily ATM
withdrawals is different from P188,000.
Level of significance = 0.05/2 = 0.925
Critical z-value + 1.96
-1.96 1.96
Decision rule: Reject null hypothesis if Z >
1.96 or Z < -1.96, otherwise do not reject
the null hypothesis
Z= (193,000 – 188,000) = 2.77
9,875 .
30
Conclusion: Reject the null hypothesis,
2.77 > 1.96, which means there is enough
to support that daily ATM withdrawals is
different from P188,000.
• Recommendation: Based on the results, the
manager needs to load more money in the
ATM than what they usually do so as to
assure that it will not run out of cash when
clients make withdrawals from it. (You can
give more recommendations aside from the
given example.)

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