Develop a hypothesis testing

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Reference no: EM132983635

Case study

A large corporation uses thousands of light bulbs every year. The brand that has been used in the past has an average life of 1000 hour with a standard deviation of 100 hours. A new brand is offered to the corporation the corporation at price far lower than one they are paying for the old brand. It is decided that they will switch to the new brand unless it is proved with level of significance of 5% that the new brand has smaller average life than the old brand. A random sample of 100 new brand builds is tested yielding n observed sample mean of 985 hours. Assuming that the standard deviation of the new brand is the same as that of the old brand.

Answer the following question

Q1. Develop a hypothesis testing for the current problem?

Q2. What conclusion should be drawn and what decision should be made?

Q3. what is the probability of accepting the new brand if it has the mean life of 950 hours?

Q4. What is the power of test for the mean of 950 hours? How these values of beta change if test had been used at1% level of significance?

Q5. Which is more serious for large corporation in this case type 1 or type II error? Explain

Reference no: EM132983635

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