MATH533: Applied Managerial Statistics Course project part B AJ DAVIS D !

A"TM #T ST$" S

S%MMA"& " !$"T A - I am 95% confident that the mean incomes will be between $39,680 (lower limit) and $ !,800 ("##er limit)$ %he com#lete ran&e is less than $50,000$ %herefore, the s#ec"lation in the mean ann"al income bein& less than $50,000 is correct$ 'lease see a##endi( A$

) - I am 95% confident that the #ro#ortion of c"stomers li*in& in an "rban area is between +9$99% (lower limit) and 58$!5% ("##er limit)$ %he com#lete ran&e is not &reater than 0%$ %herefore, the s#ec"lation for the tr"e #o#"lation #ro#ortion of c"stomers li*in& in an "rban area e(ceedin& 0% is not correct$ %he calc"lations for this can be fo"nd in a##endi( )$

, - I am 95% confident that the mean n"mber of .ears li*ed in the c"rrent home is between /0$850 .ears (lower limit) and /3$6!0 .ears ("##er limit)$ %he com#lete ran&e is not less than /3 .ears$ %herefore, the s#ec"lation in the mean n"mber of .ears li*ed in the c"rrent home bein& less than /3 .ears is not correct$ %he calc"lations for this are shown in a##endi( ,$

0 - I am 95% confident that the mean credit balance for s"b"rban c"stomers is between $ 3 6 (lower limit) and $500 ("##er limit)$ %he com#lete ran&e is &reater than $ 300$ %herefore, the s#ec"lation in the mean credit balance for s"b"rban c"stomers bein& &reater than $ 300 is correct$ 'lease see a##endi( 0 for f"rther anal.sis$

A' T(e a)erage *+ean, annual inco+e -as less t(an .5/0/// I fo"nd the a*era&e for ann"al income to be 3$! or $ 3,! 0 and standard de*iation to be / $6 or $/ ,6 0$

Descriptive Statistics: Income ($1000)

Variable Income ($1000) Mean 43.74 StDev 14.64

1"ll 2.#othesis3 %he a*era&e (mean) ann"al income was e4"al to $50,000$ 2o3 5 6 50,000 Alternate 2.#othesis3 %he a*era&e (mean) ann"al was less than $50,000$ 2a3 5 7 50,000 8ince the sam#le si9e, n : 30 I will "se 9-test for mean to test the &i*en h.#othesis$ As the alternati*e h.#othesis is 2a3 ; 7 50000, the &i*en test is a one-tailed (lower-tailed) 9-test$ <or =60$05 and >7? in 2a, I fo"nd 96 - /$6 5, so the >@eAection @e&ion? wo"ld be 97 -/$6 5
Distribution Plot
Normal, Mean= 0, StDev= 1 0.4

0.3 Densit y

0.2

0.1 0.05 0.0 -1.645 0 X

1ow I calc"late the test statistic ("sin& form"la or minitab) <orm"la3

Be ha*e Cinitab3
One-Sample Z
Test of m ! "0 vs # "0 T$e ass me% stan%ar% %eviation ! 14.64 &"' ())er ,o n% 47.1"

* "0

Mean 43.74

S+ Mean /.07

03.0/

. 0.001

Be can see that the 9-test of -3$0+ does fall in the reAection re&ion of 97 -/$6 5$ Additionall., the #-*al"e of 0$00/ is smaller than the si&nificance le*el of 0$05$ %he #-*al"e im#lies the #robabilit. of reAectin& a tr"e n"ll h.#othesis$ %herefore, I wo"ld reAect the n"ll h.#othesis$ %here is eno"&h e*idence to s"##ort the claim that the a*era&e ann"al income was less than $50,000$ ,onfidence Inter*al - minitab3

One-Sample Z
T$e ass me% stan%ar% %eviation ! 14.64 * "0 Mean 43.74 S+ Mean /.07 &"' 1I (3&.623 47.20)

)ased on the res"lts #ro*ided b. CI1I%A) abo*e, the 95% "##er confidence limit is !$80$ )eca"se 50$00 lies be.ond the 95% "##er confidence limit, we can s"##ort the claim that the a*era&e ann"al income was less than $50,000$

B' T(e true population proportion o1 custo+ers -(o li)e in an ur2an area e3ceeds 4/5 Be ha*e ++ of 50 s"r*e.ed li*e in "rban area, which is estimate for #$ % or 0$ , this is the #oint

1"ll 2.#othesis3 %he tr"e #o#"lation #ro#ortion of c"stomers who li*e in an "rban area is e4"al to 0%$ 2o3 #6 0$ 0 Alternate 2.#othesis3 %he tr"e #o#"lation #ro#ortion of c"stomers who li*e in an "rban area e(ceeds 0%$ 2a3 # : 0$ 0 %o cond"ct the lar&e sam#le 9-test, we m"st *erif. the sam#le si9e is lar&e eno"&h3 n'o6 50(0$ )6 +0 and n(/- 'o)6 50(/- 0$ )6 30$ )oth are lar&er than /5, so the sam#le si9e is lar&e eno"&h to a##l. the lar&e sam#le si9e test$ 8i&nificance De*el, =60$05 and 9-test for #ro#ortion to test the &i*en h.#othesis$ As the alternati*e h.#othesis is 2a3 # : 0$ 0, the &i*en test is a one-tailed ("##er tailed) 9-test$ <or =60$05 and >:? in 2a, I fo"nd 96 /$6 5, so the >@eAection @e&ion? wo"ld be 9:/$6 5
Distribution Plot
Normal, Mean= 0, StDev= 1 0.4

0.3 Density

0.2

0.1 0.05 0.0 0 X 1.645

1ow I calc"late the sam#le si9e test3

est an! "I #or One Proportion
Test of ) ! 0.4 vs ) 4 0.4

Sam)le 1

7 //

* "0

Sam)le ) 0.440000

&"' 5o6er ,o n% 0.3/4"3/

-0Val e 0."2

.0Val e 0./2/

Be can see that the 9-*al"e of 0$58 doesnEt fall in the reAection re&ion of 9: /$6 5$ Additionall., the #-*al"e of 0$+8+ is lar&er than the si&nificance le*el of 0$05$ %he #-*al"e im#lies the #robabilit. of reAectin& a tr"e n"ll h.#othesis$ %herefore, I wo"ldnEt reAect the n"ll h.#othesis$ %here isnEt eno"&h e*idence to s"##ort the claim that the tr"e #o#"lation #ro#ortion of c"stomers who li*e in an "rban area e(ceeds 0% ,onfidence Inter*al - mintab

est an! "I #or One Proportion

Sam)le 1 7 // * "0 Sam)le ) 0.440000 &"' 1I (0./&&&073 0."274"6)

)ased on the res"lts #ro*ided b. CI1I%A) abo*e, the 95% lower confidence limit is 0$+999$ )eca"se 0$ is &reater than the 95% lower confidence limit, we canEt s"##ort the claim that the

tr"e #o#"lation #ro#ortion of c"stomers who li*e in an "rban area is &reater than 0%$

C' T(e a)erage *+ean, nu+2er o1 6ears li)ed in t(e current (o+e is less t(an 73 6ears'

I fo"nd the a*era&e for n"mber of .ears that the c"stomer has li*ed in the c"rrent location to be /+$+6 and standard de*iation to be 5$086
Descriptive Statistics: $ears
Variable 8ears Mean 1/./60 StDev ".026

1"ll 2.#othesis3 %he a*era&e (mean) n"mber of .ears li*ed in the c"rrent home is e4"al to /3 .ears 23 ; 6 /3 Alternate 2.#othesis3 %he a*era&e (mean) n"mber of .ears li*ed in the c"rrent home is less than /3 .ears$ 2a3 ; 7 /3 8ince the sam#le si9e, n : 30 I will "se 9-test for mean to test the &i*en h.#othesis$ As the alternati*e h.#othesis is 2a3 ; 7 /3, the &i*en test is a one-tailed (lower-tailed) 9-test$ <or =60$05 and >7? in 2a, I fo"nd 96 - /$6 5, so the >@eAection @e&ion? wo"ld be 97 -/$6 5
Distribution Plot
Normal, Mean= 0, StDev= 1 0.4

0.3 Density

0.2

0.1 0.05 0.0 -1.645 0 X

1ow I calc"late the test statistic3

Fsin& Cinitab3
One-Sample Z
Test of m ! 13 vs # 13 T$e ass me% stan%ar% %eviation ! ".026 &"' ())er ,o n% 13.443

* "0

Mean 1/./60

S+ Mean 0.71&

01.03

. 0.1"/

Be can see that the 9-test of -/$03 doesnEt fall in the reAection re&ion of 97 -/$6 5$ Additionall., the #-*al"e of 0$/5+ is &reater than the si&nificance le*el of 0$05$ %he #-*al"e im#lies the #robabilit. of reAectin& a tr"e n"ll h.#othesis$ %herefore, I wo"ldnEt reAect the n"ll h.#othesis$ %here isnEt eno"&h e*idence to s"##ort the claim that the a*era&e (mean) n"mber of .ears li*ed in the c"rrent home is less than /3 .ears$ ,onfidence Inter*al - minitab3

One-Sample Z
T$e ass me% stan%ar% %eviation ! ".026 * "0 Mean 1/./60 S+ Mean 0.71& &"' 1I (10.2"03 13.670)

)ased on the res"lts #ro*ided b. CI1I%A) abo*e, the 95% "##er confidence limit is /3$6!$ )eca"se /3 is &reater than the 95% "##er confidence limit, we canEt s"##ort the claim that the a*era&e n"mber of .ears li*ed in the c"rrent home is less than /3 .ears$

D' T(e a)erage *+ean, credit 2alance 1or su2ur2an custo+ers is +ore t(an .43//

I fo"nd the a*era&e for credit balance for s"b"rban c"stomer to be 6!5 and standard de*iation to be ! +$
Descriptive Statistics: "re!it %alance($)
Variable 1re%it ,alance($) Mean 467" StDev 74/

1"ll 2.#othesis3 %he a*era&e (mean) credit balance for s"b"rban c"stomers is e4"al to $ 300$ 23 ; 6 300 Alternate 2.#othesis3 %he a*era&e (mean) credit balance for s"b"rban c"stomers is more than $ 300$ 23 ; : 300 8ince the sam#le si9e, n 7 30 I will "se t-test for mean to test the &i*en h.#othesis$ As the alternati*e h.#othesis is 2a3 ; 300, the &i*en test is a one-tailed ("##er-tailed) t-test$ <or =60$05 and >:? in 2a, I fo"nd t 6 /$!+/, so the >@eAection @e&ion? wo"ld be t : /$!+/
Distribution Plot
T, df= 21 0.4

0.3 Densit y

0.2

0.1 0.05 0.0 0 X 1.721

1ow I calc"late the test statistic$

Fsin& minitab3
One-Sample
Test of m ! 4300 vs 4 4300 &"' 5o6er ,o n% 4403

* //

Mean 467"

StDev 74/

S+ Mean 1"2

T /.37

. 0.014

Be can see that the t-test of +$3! does fall in the reAection re&ion of t : /$!+/$ Additionall., the #-*al"e of 0$0/ is smaller than the si&nificance le*el of 0$05$ %he #-*al"e im#lies the #robabilit. of reAectin& a tr"e n"ll h.#othesis$ %herefore, I wo"ld reAect the n"ll h.#othesis$ %here is eno"&h e*idence to s"##ort the claim that the a*era&e (mean) credit balance for s"b"rban c"stomers is more than $ 300$ ,onfidence Inter*al - minitab3

One-Sample
* // Mean 467" StDev 74/ S+ Mean 1"2 &"' 1I (43463 "004)

)ased on the res"lts #ro*ided b. CI1I%A) abo*e, the 95% lower confidence limit is 3 6$ )eca"se 3 6 lies below the 95% lower confidence limit, we can s"##ort the claim that the a*era&e (mean) credit balance for s"b"rban c"stomers is more than $ 300$