Hypothesis Testing Procedure

Whenever a business complaint comes up here is a recommended procedure for conducting a statistical test. The reason of such a test is to establish whether the null hypothesis or alternative hypothesis is to be accepted.

The given are steps normally adopted:

1.   Statement of the alternative and null hypothesis

2.   Statement of the level of significance to be utilized.

3.   Statement about the test statistic that is what is to be tested for illustration, the sample mean, sample proportion, difference between sample proportions or sample means

4.   Type of test whether one tailed or two tailed.

5.   Statement on critical values using the suitable level of significance

6.   Standardizing the test statistic

7.   Conclusion viewing whether to reject or accept the null hypothesis