A report in LTO stated that the average age of taxis in the Philippines is 12 years. An operations manager of a large taxi company selects a sample of 40 taxis and finds the average age of the taxis is 11.2 years. The standard deviation of the population is 2.3 years. At level of significance of 0.05, can it be concluded that the average age of the taxis in his company is less than the national average? In a clean white sheet of paper, State the hypotheses, the level of significance and critical region, compute for the value of one sample z test, write your decision rule and conclusion.
Sample mean
Population mean
Sample standard deviation (s)=2.3 years
Sample size n=40
Null Hypothesis
Alternate hypothesis
This is a left tail test.
We should use significance level
we used a z-test statistics-
P-value approach-
Conclusion: As p-value We reject Null Hypothesis and conclude that the average age of the taxi in his company is less than the national average.
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