Because of high production-changeover time and costs, a director of manufacturin

Question

Because of high production-changeover time and costs, a director of manufacturing must convince management that a proposed manufacturing method reduces costs before the new method can be implemented. The current production method operates with a mean cost of $220 per hour. A research study will measure the cost of the new method over a sample pro- duction period. a. Develop the null and alternative hypotheses most appropriate for this study b. Comment on the conclusion when Ho cannot be rejected. c. Comment on the conclusion when Ho can be rejected. 4.

Explanation / Answer

SolutionA:

given proposed manufacturing method reduces costs before the new method can be implemented.

Null Hypothesis:

Ho: =220

method reduces costs

Alterantive Hypothesis

H1:<220

left tail t test

Solutionb:

SInce no level of signiificance given

choose alpha=0.05

Decision rule:

if p>0.05 ,Ho cannot be rejected

Solutionc:

SInce no level of signiificance given

choose alpha=0.05

if p<0.05,H0 can be rejected

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