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QUESTION

1

,

6

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.

5

List the four possible results of the combinations of decisions and true states of nature for a test of hypothesis.

QUESTION

2

, 6.1

4

Libor interest rate.

 

The interest rate at which London banks lend money to one another is called the London interbank offered rate, or Libor. The British Bankers Association regularly surveys international banks for the Libor rate. One recent report (Bankrate.com, Aug. 2

3

,

20

06) had the average Libor rate at 5.40% for 3-month loans—a value considered high by many Western banks. Set up the null and alternative hypotheses for testing the reported value.

QUESTION 3 6.2

7

Producer’s and consumer’s risk. In quality control applications of hypothesis testing, the null and alternative hypotheses are frequently specified as

H0: The production process is performing satisfactorily.

Ha: The process is performing in an unsatisfactory manner.

Accordingly, α is sometimes referred to as the producer’s risk, while β is called theconsumer’s risk (Stevenson, Operations Management, 200

8

).

An injection molder produces plastic golf tees. The process is designed to produce tees with a mean weight of .

25

0 ounce. To investigate whether the injection molder is operating satisfactorily, 40 tees were randomly sampled from the last hour’s production. Their weights (in ounces) are listed in the following table and saved in theTEES file.

a. Write H0 and Ha in terms of the true mean weight of the golf tees, μ.

b. Do the data provide sufficient evidence to conclude that the process is not operating satisfactorily? Test using α = .01.

c. In the context of this problem, explain why it makes sense to call α the producer’s risk and β the consumer’s risk.

.

24

7

.2

51

.254

.2

53

.253

.248

.253

.2

55

.256

.2

52

.253

.252

.253

.256

.254

.256

.252

.251

.253

.251

.253

.253

.248

.251

.253

.256

.254

.250

.254

.255

.24

9

.250

.254

.251

.251

.255

.251

.253

.252

.253

QUESTION 4 7.

19

Does rudeness really matter in the workplace? Studies have established that rudeness in the workplace can lead to retaliatory and counterproductive behavior. However, there has been little research on how rude behaviors influence a victim’s task performance. Such a study was conducted, with the results published in theAcademy of Management Journal (Oct. 2007). College students enrolled in a management course were randomly assigned to one of two experimental conditions: rudeness condition (45 students) and control group (53 students). Each student was asked to write down as many uses for a brick as possible in five minutes. For those students in the rudeness condition, the facilitator displayed rudeness by generally berating students for being irresponsible and unprofessional (due to a late-arriving confederate). No comments were made about the late-arriving confederate for students in the control group. The number of different uses for a brick was recorded for each of the 98 students, and the data were saved in the RUDE file, shown at the bottom of the page. Conduct a statistical analysis (at α = .01) to determine if the true mean performance level for students in the rudeness condition is lower than the true mean performance level for students in the control group.

QUESTION 5, 7.25

A paired difference experiment yielded nd pairs of observations. In each case, what is the rejection region for testing H0: μd > 2?

a. nd =

12

, α = .05

b. nd = 24, α = .

10

c. nd = 4, α = .025

d. nd = 80, α = .01

QUESTION 6 6.18

Intrusion detection systems. Refer to the Journal of Research of the National Institute of Standards and Technology (Nov.–Dec. 2003) study of a computer intrusion detection system (IDS), 

Exercise 3.67

 (p. 

15

3

). Recall that an IDS is designed to provide an alarm whenever unauthorized access (e.g., an intrusion) to a computer system occurs. The probability of the system giving a false alarm (i.e., providing a warning when no intrusion occurs) is defined by the symbol α, while the probability of a missed detection (i.e., no warning given when an intrusion occurs) is defined by the symbol β. These symbols are used to represent Type I and Type II error rates, respectively, in a hypothesis testing scenario.

a. What is the null hypothesis, H0?

b. What is the alternative hypothesis, Ha?

c. According to actual data on the EMERALD system collected by the Massachusetts Institute of Technology Lincoln Laboratory, only 1 in 1,000 computer sessions with no intrusions resulted in a false alarm. For the same system, the laboratory found that only 500 of 1,000 intrusions were actually detected. Use this information to estimate the values of α and β.

QUESTION 7 7.21

Is honey a cough remedy? Refer to the Archives of Pediatrics and Adolescent Medicine (Dec. 2007) study of honey as a children’s cough remedy, 

Exercise 2.28

 (p.

51

). Children who were ill with an upper respiratory tract infection and their parents participated in the study. Parents were instructed to give their sick child a dosage of liquid “medicine” prior to bedtime. Unknown to the parents, some were given a dosage of dextromethorphan (DM)—an over-the-counter cough medicine—while others were given a similar dose of honey. (Note: A third group gave their children no medicine.) Parents then rated their children’s cough symptoms, and the improvement in total cough symptoms score was determined for each child. The data (improvement scores) for the 35 children in the DM dosage group and the 35 children in the honey dosage group (saved in the HONEYCOUGH file) are reproduced in the table below. Do you agree with the statement (extracted from the article), “honey may be a preferable treatment for the cough and sleep difficulty associated with childhood upper respiratory tract infection”? Use the comparison of two means methodology presented in this section to answer the question.

11

10

15

10

10

11

 

 

12

12

8

12

9

11

15

10

15

9

13

8

12

10

8

9

12

 

4

6

9

4

7

7

9

12

10

11

6

4

9

7

8

 

12

12

4

12

13

7

10

13

9

4

4

10

15

9

12

6

 

Honey Dosage:

  12

11

15 10

13

4

16

9

14

6 8
5

DM Dosage:

7 3

Source: Paul, I. M., et al. “Effect of honey, dextromethorphan, and no treatment on nocturnal cough and sleep quality for coughing children and their parents,”Archives of Pediatrics and Adolescent Medicine, Vol. 161, No. 12, Dec. 2007 (data simulated).

QUESTION8 7.

27

The data for a random sample of 10 paired observations are shown in the table below and saved in the LM7_27 file.

3

4

5

6

34

7

8

51

9

10

51

55

Pair

Sample from Population 1

Sample from Population 2

1 19 24
2 25 27

31

36

52 53

49

55

34

59

66

47

17

20

a. If you wish to test whether these data are sufficient to indicate that the mean for population 2 is larger than that for population 1, what are the appropriate null and alternative hypotheses? Define any symbols you use.

b. Conduct the test, part a, using α = .10.

c. Find a 90% confidence interval μd. for Interpret this result.

d. What assumptions are necessary to ensure the validity of this analysis?

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