Training module on

Hypothesis Testing

Basics 1. Hypothesis parameter

Hypothesis Testing ?
is assumption about Population

a) Average adult drinks 1.7 cups of coffee per day b) Not more than two percent of products we sell are defective.

2. Hypothesis testing provides conclusion on whether to accept the Hypothesis

Null & Alternative Hypothesis.

1. Null Hypothesis: H0, It is based on belief that mean of Population is , = or a specific value.

2. A null hypothesis can only be rejected or failed to be rejected , it can not be accepted because of lack of evidence.

Null & Alternative Hypothesis Example

1. For example average Weight of Component is Six grams, then Null Hypothesis can be stated in one of the following ways.
a) H0: = 6, 6 or 6.

2. Alternative Hypothesis, denoted by H1, represents opposite of Null Hypothesis and holds true if Null Hypothesis is false.

3. Alternative Hypothesis states that mean of the population is < 6, > 6 or 6 grams.

Test Statistic
1. Value calculated from Sample Information is called as Test Statistic

2. Test statistic is compared with Critical Value, in order to reject or not to reject Null Hypothesis.

3. Critical values are obtained from Distribution Tables, against chosen level of Significance, i.e. 1,5 or 10.

Types Of Errors
1. Type I Error: Rejecting Null Hypothesis when it is true. For example incoming products are good but labeled as Defective. Producers risk error.

2. Type II Error: This type of error occurs, when null hypothesis is not rejected, when it actually should have been rejected. For example incoming products are defective but labeled as good.

One Tail Test

1. Any hypothesis test has risk associated it with

2. If null hypothesis is established to test whether sample value, smaller or larger than Population value then entire risk is placed on either end of distribution curve.

3. This constitutes one tail test. If H0: > 20 mm, then H1: > 20

One Tail Test Example Right Tail Test

1. A Golf Ball company claims that its newly invented ball increases the driving distance of tee by more than 20 yards.

2. Hypothesis H0: 20m & H1: >20 m

One Tail Test - Example

1. Hypothesis testing procedure is same for both 1 tail & 2 tail test. Sample mean is compared with critical values of Rejection region.

2. Two conditions are possible as below,

a) Mean sample falls within white (Acceptance) region, then we do not reject H0, we do not have enough evidence to support H1, which states that new Golf ball increases distance of tee by more than 20 yards.

One Tail Test - Example

b) If sample mean falls in (Rejection) region, then we reject H0, i.e. we have enough evidence to support H1, which confirms the claim that new Golf ball increases distance of tee by more than 20 yards.

3. Rejection region shown in above distribution is always consistent with direction of inequality i.e. For H1: > 20, rejection region will be in right tail of the sampling distribution. For H1: < 20 rejection region will be in Left tail of the distribution.

Two Tail Test - Example

1. Is required when Null Hypothesis is established to test whether Population shift has occurred in either direction of mean.

2. Allowable error is divided in two equal parts one each for right & left tail of the distribution.

Sample Size Calculation

1. Correct procedure of Sample Size calculation is that, to consider desired and error and then calculate Necessary Sample Size

2. Example variable data Sample Size using risk:

b) It is required to determine whether operational adjustment in shipyard will alter the process hourly means by as much as 10 Metric Tons per hour. Minimum sample size at 95% confidence level. Historical Standard deviation of Hourly Output is 35 tons

Sample Size Calculation

1. Example variable data Sample Size using risk:
b) Sample size equation for variable data is
=1.96*1.96 *35*35/10*10 = 470.59 Get 470 hourly output values , and then determine hourly average. If this mean deviates by more than eight hours from previous hourly average, then significant change at 95% confidence interval has occurred. If sample mean deviates by less than eight tons per hour, then mean shift is just by chance cause.

Thank you
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