EARTHQUAKE DRILL ON THURSDAY

Fourth Long Exam

6 December 2014 (Saturday)
1:00 4:00
Final Exam
13 December 2014 (Saturday)
8:00 12:00

Todays Agenda:
Hypothesis Testing on Proportion
Choice of Sample Size

Hypothesis
Testing

General Procedure for Hypothesis testing

Step
1:
Step
2:
Step
3:
Step
4:
Step
5:
Step
6:
Step
7:
Step

Determine the Parameter of Interest

State the Null Hypothesis
State the Alternative Hypothesis
Determine Alpha
Determine Test Statistic
Determine Rejection Region
Compute Test Statistic
Conclude

Hypothesis
Testing

Hypothesis Test on Mean,

Normal Distribution, Variance Known

x o
zo

n
Hypothesis Test on Mean,
Normal Distribution, Variance Unknown

x o
to
s
n

Hypothesis
Testing

Hypothesis Test on Variance

(n 1)s

o2
2
o

Hypothesis
Testing

Hypothesis Test on Proportion

zo

x np o
np o (1 p o )

Hypothesis
Testing

GUIDED EXERCISE 2.1

In a lot with 1000 toy balls, a sample of 80 is taken and the
number of defective toy balls in the sample was found to be 6.
Test the hypothesis that the number of defective toy balls in
the lot is 80 with a significance level of = 0.05

Hypothesis
Testing
1. The proportion of defective toy balls, p
2. Ho: p = 0.08
3. H1: p 0.08
4. a = 0.05
5.zo

x np o
np o (1 p o )

6. Reject when |zo|> z0.025 = 1.96

7. zo

x np o
np o (1 p o )

6 (80)(0.08)
(80)(0.08)(0.92)

0.16485

8. Since 0.16485 < 1.96, we fail to reject Ho at alpha equal to 0.05.

We therefore conclude that the number of defective toy balls is

GUIDED EXERCISE 2.2

Hypothesis
Testing
1. The proportion of defective toy balls, p
2. Ho: p = 0.05
3. H1: p < 0.05
4. a = 0.05
5.zo

x np o
np o (1 p o )

6. Reject when zo< -z0.05 = -1.64

7.

zo

x np o
np o (1 p o )

4 (200)(0.05)
(200)(0.05)(0.95)

1.95

8. Since -1.95 < -1.64, we reject Ho at alpha equal to 0.05. We have

process capability.

Hypothesis
Testing

Type I Error (Alpha

Error)
Rejecting the null hypothesis when the null
hypothesis is actually true

Type II Error (Beta Error)

Accepting the null hypothesis when the null
hypothesis is actually fallse

Power of a Statistical
testCorrectly rejecting the null hypothesis when
it is false
Power = 1

Hypothesis
Testing

Suppose that the null hypothesis is false (Type II Error) and the
mean actually deviates such that the true value of the mean is
= 0 + . The test statistic becomes:

x o x ( o )

zo

n
n
n

Hypothesis
Testing

Therefore we can compute Beta as

n
n

za
za

2


2

za

2

Assuming
this to be
very small

Hypothesis
Testing

Computation of Sample Size

n

(za / 2 z )2 2

Hypothesis
Testing
Ten measurements of weight of potato chip packs were done for a
certain manufacturing company. Historical data states that the
distribution of the weight of potato chip packs are normally
distributed with population standard deviation of 1.07g. Suppose that
the analyst wishes to design the test (with significance level of =
0.05)
0.05) so
so that
that ifif the
the true
true mean
mean weight
weight differs
differs from
from 101g
101g by
by 0.5g,
0.5g, the
the
testtest
will detect
will detect
this (i.e.
this
reject
(i.e. Hreject
101)
= 101)
a high
with
probability
a high of
0: = H
0: with
probability
90%.of
Find
90%.
the Find
required
the required
sample size.
sample size.

n
a = 0.05

(za / 2 z )2 2
2
=?
Power = 0.9 = 1
= 0.10

= 1.07

= 0.5

Hypothesis
Testing
Ten measurements of weight of potato chip packs were done for a
certain manufacturing company. Historical data states that the
distribution of the weight of potato chip packs are normally
distributed with population standard deviation of 1.07g. Suppose that
the analyst wishes to design the test (with significance level of =
0.05) so that if the true mean weight differs from 101g by 0.5g, the
test will detect this (i.e. reject H0: = 101) with a high probability of
90%. Find the required sample size.

(za / 2 z )2 2
2

(z0.025 z0.10)2(1.07)2
n
(0.5)2
n 49

Hypothesis
Testing

OR WE CAN USE THE OC CURVES

OC Curves
These curves plot against a parameter d
for various sample sizes n

Hypothesis
Testing

Hypothesis
Testing

Hypothesis
Testing

Hypothesis
Testing

Hypothesis
Testing

We can notice from the OC Curves that:

The further the true value of the mean from the hypothesized
value of the mean (thus is larger), the smaller the probability
for Type II Error (thus is smaller) for a given n and
This means that larger differences in the mean are easier to
detect than small ones
The probability for Type II Error decreases as n increases
To detect a specified difference of in the mean, we may
make the test more powerful by increasing the sample size

Hypothesis
Testing
Ten measurements of weight of potato chip packs were done
for a certain manufacturing company. Historical data states
that the distribution of the weight of potato chip packs are
normally distributed with population standard deviation of
1.07g. If the true mean weight is 101.75g and the hypothesized
value of the mean is 101g, what is the probability of Type II
Error ?

101 101.75
1.07

0.75
1.07

0.70094

n = 10
What OC curve will we use?
Z- test, Two sided, alpha = 0.05

Hypothesis
Testing
d = 0.7

n = 10

= 0.4

Hypothesis
Testing

GUIDED EXERCISE 2.3

Ten measurements of weight of potato chip packs were done
for a certain manufacturing company. Historical data states
that the distribution of the weight of potato chip packs are
normally distributed but with unknown population standard
deviation. The sample however yields a standard deviation of
1.02779g. If the true mean weight exceeds by as much as
0.82g, is the sample size used adequate to ensure that H0: =
101g will be rejected with probability at least 0.7?
What is the power of the test?
Desired power should be greater than 0.7
d = 0.8
n = 10

Hypothesis
Testing

Beta = 0.24, Power = 0.76

Sample is enough

Hypothesis
Testing

There are also OC curves for Chi-squared,

which will be used for tests on variance or
standard deviation

Hypothesis
Testing

OC curve for test on proportion

Z-test therefore just the same as the test on mean

Next Time on IE 27
Goodness of Fit
Hypothesis Testing on Two Samples

Sourc: Taha

.Fin.