Answer to Question #130175 in Statistics and Probability for Lindo

Question

The manager at Costello Drug Store assumes the company’s employees are honest. However, there have been many shortages from the cash register lately. There is only one employee who could have taken money from the register during these periods. Realizing that the shortages might have resulted from the employee inadvertently giving incorrect change to customers, the employer does not know whether to forget the situation or accuse the employee of theft. In words, what are the null and alternative hypotheses? Explain your choices

.4 The system is tested on a sample of one hundred computers and the average connection speed is found to be far below 400 kilobits. What hypothesis should probably be rejected? Explain. If the customer needs a connection speed of 400 kilobits to run her application programs, what is the business decision that corresponds to the decision regarding the hypotheses?

Answer 1

solution part 1

Since the employer assumes the employees are innocent;

null hypothesis: the employee inadvertently gives customers incorrect change

alternative hypothesis: the employee does not give customers incorrect change

The employer needs to prove that the employee doesn't give incorrect change. He will reject the null hypothesis and accuse the employee of stealing if he finds that the the employee doesn't give incorrect change to customers

solution part 2

We reject the null hypothesis that:

the system's minimum average connection speed is 400 kilobits.

This is the condition that has to be met so that getting speeds significantly below 400 becomes a valid alternative hypothesis.

The business decision would be not to give the system to the client because it does not meet her requirements.