Answer to Question #271426 in Statistics and Probability for RBT

Question

The financial department of a large retail chain is concerned about a possible slowdown in payments by customers. The department randomly selects a sample of 25 accounts and finds that the mean and the standard deviation of the number of days that the accounts have remained unpaid are 53 and 9, respectively. They want to test the claim that the population mean of the number of days that accounts have remained unpaid exceeds 50 days.

(i) State the null and alternative hypotheses for the above problem

Answer 1

(i) The following null and alternative hypotheses need to be tested:

$H_0: \mu\leq 50$

$H_1: \mu>50$

This corresponds to a right-tailed test, for which a t-test for one mean, with unknown population standard deviation, using the sample standard deviation, will be used.