Statistics Review

Statistical Inference
Point and Interval Estimates (Confidence Intervals)
– For the mean
– For the variance
– For the proportion
Hypothesis Testing
– Types of errors
– Power
– Sample size
– z-test for means
– t-test for means
– Chi-square test for variances
– z-test for proportions

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 Statistics Review
Statistical Inference
In statistical inference, the objective is to gain some understanding
about a population by taking a sample.
Good sampling technique involves taking a random sample.
Random means that each element selected had an equal probability
of being chosen. Random samples are used to ensure that personal
preferences do not influence the sample statistics.
There are two main ways to go about understanding the population.
– One way is to use the sample to make estimates of the population
parameters, either point estimators or confidence interval estimates.
– Another way is to make an estimate or to set a value and then perform
a test to see if the estimate or value is correct within some probability of
certainty. This method of testing is called Hypothesis Testing. A guess
(theory) is made about how something works. Tests are performed to
try and prove the theory is wrong. If the tests cannot prove the theory to
be wrong, the theory is not rejected.

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Statistical Inference
Example sample statistics:
– X, the sample mean is a statistic
– s2, the sample variance is a statistic
– s, the sample standard deviation is a statistic
– ^ the sample proportion is a statistic
p,
The probability distribution of a statistic is called a sampling
distribution. Important sampling distributions associated with
normally distributed populations are:
– The normal distribution for the sample mean with known variance.
– The chi-square, or 2, distribution for sample variance.
– The student’s-t distribution for small sample sizes.
– The normal distribution for proportions (approximation)

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 Statistics Review
Estimation of Process Parameters
Random variables - which are sample data - are characterized by
their probability distribution. These probability distributions are used
to model some quality characteristic such as diameter of a shaft or
fraction defective being produced by a machine.
To better understand the process, we require a means of using
sample data to estimate the parameters of the probability
distribution.
The statistics used to estimate parameters of probability distributions
are called estimators.
– A point estimator is a statistic that gives an estimate of a single value of
an unknown parameter.
– An interval estimator is an interval that has a probability of containing
the true value of an unknown parameter.

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 Statistics Review
Point Estimation
Suppose a large quantity of shafts have been produced on a
machining center. The mean diameter and the variance of the
diameters about the mean are unknown. A way to estimate the true
values is to take a random sample of shafts and measure them.
Then the sample mean (X) and sample variance (s2) are point
estimators of the true mean and variance for all the shafts in that lot.
Greek letters are used for population parameters.
Roman letters are used for sample statistics that estimate the
population parameters.
– μ is estimated by X
– σ2 is estimated by s2

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Interval Estimation – Confidence Intervals
An interval estimate of a parameter is the interval between two
statistics that have some level of probability of including the true
value.
P([L, U] contains the true value of a parameter) = 1 – α
– L = Lower confidence limit
– U = Upper confidence limit
– 1 - α = confidence coefficient
Two-tail
Confidence Interval
L U

For a 95% confidence interval, (1 - α) equals 0.95, therefore α = 0.05.

The above confidence interval is a two-sided confidence interval. If a
large number of these confidence intervals are constructed from
sample data, then 100(1-α)% of them will contain the true value of
the parameter.
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 Statistics Review
Interval Estimation – Confidence Intervals
A one-sided upper confidence
interval may also be constructed
when we are not concerned how One-tail
small the parameter may be. Confidence Interval
U

A one-sided lower confidence

interval may also be constructed
when we are not concerned how One-tail
large the parameter may be. Confidence Interval
L

The correct way to interpret a confidence interval is to

remember that the probability is attached to the interval itself;
i.e. the interval [L, U] has a probability of 1 - a of containing the
true value of the population parameter.
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 Statistics Review
“The Lady Tasting Tea” by David Salsburg
Interval estimation was propounded by Jerzy Neyman in an
appendix to a paper in 1934
Initially seen as a “confidence trick” and there was doubt in its
validity
– Question of where the probability lies
– Data has been observed, the parameter is a fixed unknown number, so
the probability that the parameter takes on a specific value is 100% if
that was the value or 0% if not
– A 95% confidence interval deals with a 95% probability, but of what?
– The distinction is that a confidence interval is not the probability that we
are correct, but the frequency of correct statements that a statistician
will make on average
– A confidence interval says nothing about how “accurate” the current
estimate is
 Statistics Review
Confidence Intervals – Mean with Known Variance or Large
Sample Sizes
The standard normal z sampling distribution is used to construct
100(1 - a)% confidence intervals for the mean, , when the process
standard deviation, , is known, or for large sample sizes
– (n > ~30, n > ~50, n > ~100 depending on who you ask).


L  X  Za 2
n

za/2 U  X  Za 2
n

Where za/2 is the z-value that has α/2 area in the tails of the normal
curve.
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 Statistics Review
Confidence Intervals – Mean with Known Variance or Large
Sample Sizes
For 90%, 95% and 99% confidence intervals:

a 1–a za/2
0.10 0.90 1.645
0.05 0.95 1.96
0.01 0.99 2.575

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 Statistics Review
Mean with Known Variance or Large Sample Sizes –
Example
Construct a two-tailed 90% confidence interval for the unknown
population mean where it is known that the population variance is
σ2 = 40.19. A sample of 30 is taken and the sample mean is
calculated to be 280.16.

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 Statistics Review
Mean with Known Variance or Large Sample Sizes –
Example
The interval [278.28, 282.06] has a probability of 0.9 of containing
the true value of the mean.

278.26 282.06

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 Statistics Review
Minitab Exercise – Confidence Interval on Mean with
Known Variance
Select Stat  Basic Statistics  1-Sample Z
– Select “Summarized Data” from the drop-down menu
– Enter 30 for the “Sample size”, 280.16 for the “Sample mean” and 6.34
(square root of 40.19) for the “Known standard deviation”
– Click on the “Options” button
Enter 90 for the “Confidence level”
Click OK
– Click OK
One-Sample Z
The assumed standard deviation = 6.34

N Mean SE Mean 90% CI

30 280.16 1.16 (278.26, 282.06)
 Statistics Review
Confidence Intervals – Mean with Unknown Variance or
Small Sample Sizes
The t sampling distribution is used to construct 100(1 - a)%
confidence intervals for the mean, , when the process standard
deviation, , is unknown or when there is limited data (say n < 30).

s
L  X  ta 2, n 1
n
s
U  X  ta 2, n 1
ta/2,n-1 n

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 Statistics Review
“The Lady Tasting Tea” by David Salsburg
William Sealy Gosset started working for the Guinness Brewing
Company of Dublin, Ireland in 1899
It was against company policy to allow publications by its employees
due to a master brewer publishing an article in which the secret
components of one of their brewing process was revealed a few
years before
Working with Karl Pearson, they decided to publish Gosset’s first
discovery under the pseudonym of “Student” in Biometrika
He did this for 30 years
At some point, the Guiness family became aware that Gosset had
been secretly writing and publishing scientific papers contrary to
company policy, but given that this was mostly extracurricular
activity and his rise within the company, no undue actions were
taken
 Statistics Review
Confidence Intervals – Mean with Unknown Variance or
Small Sample Sizes
Where ta/2,n-1 is the t-value that has α/2 area in the tails of the t-
distribution with n – 1 degrees of freedom.
The t-distribution depends on the sample size.
– For small samples, it is wider than the Normal distribution and becomes
narrower with more data.
– Eventually, the t-distribution is the same as the Normal distribution for
large samples (say n > 120 observations).

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 Statistics Review
Confidence Intervals – Mean with Unknown Variance or
Small Sample Sizes
t-values for 90%, 95% and 99% confidence intervals:
n n-1 (dof) 90% 95% 99%
(a=0.10) (a=0.05) (a=0.01)
6 5 2.015 2.571 4.032
11 10 1.813 2.228 3.169
16 15 1.753 2.132 2.947
21 20 1.725 2.086 2.845
31 30 1.697 2.042 2.750
41 40 1.684 2.021 2.705
81 80 1.664 1.990 2.639
121 120 1.658 1.980 2.617
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 Statistics Review
Small Sample Sizes – Example
Construct a two-tailed 95% confidence interval for the unknown
population mean where the population variance is unknown. A
sample of 20 is taken and the sample mean is calculated to be 27.5
and the sample standard deviation is 2.6.

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 Statistics Review
Small Sample Sizes – Example
The interval [26.28, 28.72] has a probability of 0.95 of containing the
true value of the mean.

26.28 28.72

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 Statistics Review
Minitab Exercise – Confidence Interval on Mean with Small
Sizes/Variance Unknown
Select Stat  Basic Statistics  1-Sample t
– Select “Summarized Data” from the drop-down menu
– Enter 20 for the “Sample size”, 27.5 for the “Sample mean” and 2.6 for
the “Sample standard deviation”
– Click on the “Options” button
Make sure default is 95 for the “Confidence level”
Click OK
– Click OK

One-Sample T

N Mean StDev SE Mean 95% CI

20 27.500 2.600 0.581 (26.283, 28.717)
 Statistics Review
Confidence Intervals – Variance
The 2 (chi-square) sampling distribution is used to construct
100(1 - a)% confidence intervals for the variance, 2.

L
n  1s 2
a2 2, n 1

U 
n  1s 2
2 a/2,n-1
12a 2, n 1

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Confidence Intervals – Variance

Where a 2,n 1 and 1a 2,n1 are the χ2 values which have α/2
2 2

area in the upper and lower tails of the distribution.

The χ2 distribution also depends on the sample size.
Since the distribution is not symmetric, both of the χ2 values must be
identified from a table to determine the lower and upper confidence
limits.

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 Statistics Review
Confidence Intervals – Variance
χ2 values for 90%, 95% and 99% confidence intervals:

n n-1 90% (L) 90% (U) 95%(L) 95%(U) 99%(L) 99% (U)
6 5 11.07 1.145 12.83 0.831 16.75 0.412
11 10 18.31 3.940 20.48 3.247 25.19 2.156
16 15 25.00 7.261 27.49 6.262 32.80 4.601
21 20 31.41 10.85 34.17 9.591 40.00 7.434
31 30 43.77 18.49 46.98 16.79 53.67 13.79
41 40 55.76 26.51 59.34 24.43 66.77 20.71
51 50 67.50 37.69 71.42 32.36 79.49 27.99
101 100 124.3 77.93 129.6 74.22 140.2 67.33

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 Statistics Review
Variance – Example
A manufacturer is making valve spools. If the standard deviation of
the process is too large, some spools will fall into the valve body
while others will stick. Ten spools are collected and measured and a
sample variance (s2) of 0.001 was found. Construct a 90%
confidence interval on the population variance—the variance in the
size of the spools.

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 Statistics Review
Variance – Example
Since the confidence coefficient is 0.90, we say that the interval from
0.00053 to 0.0027 has a 90% chance of containing the true variance
of the valve spools.

0.00053 0.0027

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 Statistics Review
Minitab Exercise – Confidence Interval on Variance
Select Stat  Basic Statistics  1-Variance
– Select “Sample variance” from the drop-down menu
– Enter 10 for the “Sample size” and 0.001 for the “Sample variance”
– Click on the “Options” button
Enter 90 for the “Confidence level”
Click OK
– Click OK
Test and CI for One Variance
Method
The chi-square method is only for the normal distribution.
The Bonett method cannot be calculated with summarized data.

Statistics
N StDev Variance
10 0.0316 0.00100

90% Confidence Intervals

Method CI for StDev CI for Variance
Chi-Square (0.0231, 0.0520) (0.00053, 0.00271)
 Statistics Review
Confidence Intervals – Proportions
The normal z sampling distribution can be used to construct
100(1-a)% confidence intervals for the proportion, p, from a binomial
process.
The distribution parameter, p, usually corresponds to the proportion
of nonconforming of defective units found in a sample (these are
often called “successes”).
If x nonconforming units are found in a sample of size n, then the
estimator for p is

x
pˆ 
n

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 Statistics Review
Confidence Intervals – Proportions
If n is large, np  5 and n(1-p)  5, then a normal approximation (the
z-values) may be used to construct confidence intervals for the
unknown proportion of nonconforming units in the population.
za/2 is the z-value that has α/2
pˆ 1  pˆ 
L  pˆ  za 2 area in the tails of the normal
n curve.
pˆ 1  pˆ  The same values for 90%, 95%
U  pˆ  za 2 and 99% intervals as in the
n
previous table (page 85) for
known means are used.
pˆ 1  pˆ  is the sample standard deviation of the binomial
n distribution.

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 Statistics Review
Proportions – Example
In a random sample of 100 wheel bearings, 20 were found to be
defective units. Construct a two-tailed 95% confidence interval for
the proportion defective units.

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 Statistics Review
Proportions – Example
The interval [0.1216, 0.2784] has a probability of 0.95 of containing
the true value of the mean.

0.1216 0.2784

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 Statistics Review
Minitab Exercise 1 – Confidence Interval on Proportion
Select Stat  Basic Statistics  1 Proportion
– Select “Summarized Data” from the drop-down menu
– Enter 20 for the “Number of events” and 100 for the “Number of trials”
– Click on the “Options” button
Enter 95 for the “Confidence level”
Select “Normal approximation” for the Method
Click OK
– Click OK

Test and CI for One Proportion

Sample X N Sample p 95% CI

1 20 100 0.200000 (0.121601, 0.278399)

Using the normal approximation.

 Statistics Review
Minitab Exercise 2 – Confidence Interval on Proportion
Redo the example using the “Exact” method
Select Stat  Basic Statistics  1 Proportion
– Select “Summarized Data” from the drop-down menu
– Enter 20 for the “Number of events” and 100 for the “Number of trials”
– Click on the “Options” button
Enter 95 for the “Confidence level”
Select “Exact” for the Method
Click OK
– Click OK
Outcome is similar to that using
Test and CI for One Proportion
the Normal approximation
Sample X N Sample p 95% CI Really no reason not to use the
1 20 100 0.200000 (0.126656, 0.291843) Exact method when available
with software
 Statistics Review
Hypothesis Testing
In statistical inference, the objective is to gain some understanding
about a population by taking a sample.
There are two main ways to go about understanding the population.
– One way is to use the sample to make estimates of the population
parameters, either point estimators or confidence interval estimates.
– Another way is to make an estimate or to set a value and then perform a
test to see if the estimate or value is correct within some probability of
certainty. This method of testing is called Hypothesis Testing. A guess
(theory) is made about how something works. Tests are performed to try
and prove the theory is wrong.
– If the test data fails to provide sufficient evidence that the theory is
incorrect, then the hypothesis is not rejected (this is not the same as
saying that it is accepted).

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 Statistics Review
Hypothesis Testing
As an example, a manufacturer is producing bolts that are cut to
length.
– The manufacturer states that the average length is 10.0 cm.
A test is performed - take a sample and calculate a statistic - to
show that the true mean is not equal to 10.0 cm.
– Devils advocate approach
If the test is able to show the true mean is different from 10.0 cm,
then we reject the manufacturer's statement. Otherwise, we say we
do not have enough evidence to reject it.

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 Statistics Review
Hypothesis Testing
To properly set-up a Hypothesis Test, we need the following
elements:
– A null hypothesis, Ho:
– An alternative hypothesis, HI:
– A test statistic
– A rejection region
The null hypothesis states that which we will try to prove incorrect.
For our example, the manufacturer's statement is the null
hypothesis. It will be written:
– Ho: μ = 10.0
Null hypothesis: the mean equals 10.0

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 Statistics Review
Hypothesis Testing
The alternative hypothesis is the statement that we will accept if the
evidence does not support the null hypothesis. From the
example:
– HI: μ ≠ 10.0
Alternative hypothesis: the mean does not equal 10.0

Once the test statistic has been calculated, determine if the value
falls in a rejection region on the premise that the null hypothesis is
true.
– If the value is in a rejection region, then the null hypothesis is rejected
(the evidence does not support the null hypothesis).
– If the null hypothesis is rejected, the alternative hypothesis is accepted.

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 Statistics Review
Hypothesis Testing
Distribution of Test Statistic given the null
hypothesis is true
Two-sided test

a/2 a/2
HI: Reject H0 H0: Cannot Reject HI: Reject H0

One-sided test

H0: Cannot Reject HI: Reject H0

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 Statistics Review
Hypothesis Testing
It is most proper to state that we do not have enough information to
reject the null hypothesis.
If the sample size is large enough, all null hypotheses can be
rejected eventually.
– Finding a significant statistical difference does not equate to a
practically important difference
– Something trivial can be statistically significant with enough data
However, the goal is to look for functional/important differences
between two or more potentially different processes.
In other areas of this material we might say that we accept the null
hypothesis, which is a common way to say that we cannot reject the
null hypothesis.

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 Statistics Review
“The Lady Tasting Tea” by David Salsburg
Karl Pearson’s goodness of fit test was a precursor to hypothesis, or
significance, testing
Data became significant if they could be used to reject a proposed
distribution
The word “significant” was used in the late-nineteenth-century
English meaning, which is that the computation signified or showed
something
In its current meaning, “significant” implies something important
Therefore, do not conflate statistical significance with practical
importance
 Statistics Review
Hypothesis Testing
There are three types of hypotheses that can be tested:
– A two-tailed test
H0:  = 0 Remember to divide a in half
H1:   0 for a two-tailed test, and still
– B one-tailed test, left tail use a/2 in one tail for a
H0:  = 0 or   0 one-tailed test.
H1:  < 0
– C one-tailed test, right tail
H0:  = 0 or   0
H1:  > 0
Tip: For one tailed tests, the < or > sign in the alternate hypothesis
points (like an arrow) to the appropriate tail.
Tip: If no direction is indicated (less than or greater than), assume a
two-tailed test.

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 Statistics Review
Type I and II Errors
Whenever we deal with samples, it is possible to make errors in
estimating the truth of the situation we are investigating. We attempt
to control the severity of such errors by using α and β values.
Type I Error refers to the possibility of rejecting that which is good.
This type of error is also called Producer's Risk or α Error.
Type II Error is the possibility of accepting that which is bad. It is
also called Consumer's Risk or β Error.
For a fixed sample size, α and β are inversely related; as one
increases, the other decreases.
Increasing the sample size can reduce both α and β.
When performing hypothesis testing, we select an α value on which
to base our tests. A value of α = 0.05 (5% risk) is conventional.
– The value for β is determined by the true but unknown circumstances

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 Statistics Review
Type I and II Errors
The truth table below illustrates these types of errors.

Reality H0 is True H0 is False

Decision
H0 is True No error Type II error
Correct decision b error
Consumer’s risk
H0 is False Type I error No error
a error Correct decision
Producer’s risk

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 Statistics Review
Power of the Test
1 - β is referred to as the power of the test in hypothesis testing.
– The lower the β-risk of accepting an untrue hypothesis, the higher the
power, but the α -risk of rejecting a true hypothesis increases.
The larger the real difference between the observed statistic and the
hypothesized population parameter (e.g. X and 0), the higher the
power of the test.
Increasing the sample size can decrease both α and β, and increase
the power of the test.

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Sample Size
Often, the sample size is estimated a priori by solving for n given
values for the other variables.
– The α and β risks
– The minimum shift to be detected
– The variation must be specified/estimated.
Software programs greatly facilitate these calculations.

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 Statistics Review
Hypothesis Test – Mean with Known Variance or n > 120
Ho: μ = μo

HI: μ ≠ μo

Test Statistic: Z 
 X μ 
0


0
n

Rejection Region: Zo < -zα/2 or Zo > zα/2

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 Statistics Review
Mean with Known Variance – Example
A manufacturer of valves makes a valve with a mean diameter of
0.7500 and standard deviation of 0.005. A batch of 25 values is
purchased. Inspection determines the sample mean to be 0.7518. Is
the sample mean different from the manufacturer's stated value at a
5% significance level?
Ho: μ = 0.7500
HI: μ ≠ 0.7500

Test statistic:

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 Statistics Review
Mean with Known Variance – Example
Rejection region: Reject Ho if Zo < -zα/2 or Zo > zα/2
Using α = 0.05:
– -Zα/2 = -1.96
– Zα/2 = 1.96

Z0=1.8

Cannot Reject
-Za/2=-1.96 Za/2=1.96

Since Zo is not in the rejection region, we do not reject Ho. There is

no statistically significant difference between the stated mean value
of 0.7500 and the sample mean value of 0.7518.

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 Statistics Review
Minitab Exercise 1 – Mean with Known Variance or Large
Sample Sizes
Select |Stat  Basic Statistics  1-Sample Z
– Select “Summarized Data” from the drop down menu
Enter 25 in the “Sample size” window
Enter 0.7518 in the “Sample mean” window
Enter 0.005 in the “Known standard deviation” window
– Check the “Perform hypothesis test” box
Enter 0.75 in the “Hypothesized mean” window
– Click the Options button
Make sure the “Confidence level” is 95.0 (this corresponds to a significance
level of 5%; a = 0.05)
Make sure the “Alternative hypothesis” is “Mean  hypothesized mean” for a
two-sided alternative hypothesis
Click OK
– Click OK Note that you cannot select any
Graphs with Summarized Data!
 Statistics Review
Minitab Exercise 1 – Mean with Known Variance or Large
Sample Sizes
Statement of Null and Alternate Hypotheses

One-Sample Z

Test of mu = 0.75 vs not = 0.75

The assumed standard deviation = 0.005

N Mean SE Mean 95% CI Z P

25 0.75180 0.00100 (0.74984, 0.75376) 1.80 0.072

95% confidence interval Z-value of 1.80 is within the do not reject

includes the hypothesized
value of 0.75, we therefore
do not reject the null
hypothesis.
region between –1.96 and +1.96.
Alternately, the p-value is not less than the
a-value of 0.05.
Either way, the null hypothesis is not
rejected.
 Statistics Review
Minitab Exercise 2 – Mean with Known Variance or Large
Sample Sizes
Assembly specifies that the press force must equal 250 ft lbs/sq
inch. A new cylinder is tested and gives the following results:

261 275 242 251 254 249 268

Would the new cylinder meet Assembly’s requirement at a 5%

significance level?
The standard deviation of the manufacturing process is known to be
10 ft lbs/sq inch.
 Statistics Review
Minitab Exercise 2 – Mean with Known Variance or Large
Sample Sizes
Open the file “Topic02PressForce.MTW”
Select Stat  Basic Statistics  1-Sample Z
– Select “One or more samples, each in a column” from the drop down
menu
– Click in the blank window below the drop down menu to see a list of
available variables to analyze in the window on the left

Click in here to see this.

 Statistics Review
Minitab Exercise 2 – Mean with Known Variance or Large
Sample Sizes
– Double click on “C1 Press Force” to select it as the variable(s) to
analyze.
– Enter 10 in the “Known standard deviation” window.
– Check the “Perform hypothesis text” box and enter 250 in the
“Hypothesized mean” window.
– Click on the “Options” button
Make sure that the Confidence level is 95.0 and that “Mean  hypothesized
mean” (for a two-sided test) is selected in the “Alternative hypothesis” drop
down box.
Click OK
– Click on the “Graphs” button
Select the “Histogram” box.
Click OK
– Click OK
 Statistics Review
Minitab Exercise 2 – Mean with Known Variance or Large
Sample Sizes

One-Sample Z: Press Force

Test of μ = 250 vs ? 250
The assumed standard deviation = 10

Variable N Mean StDev SE Mean 95% CI Z P

Press Force 7 257.14 11.51 3.78 (249.73, 264.55) 1.89 0.059

If the confidence interval If the p-value is greater than the

contains the hypothesized
value, then accept the null
hypothesis.
significance level (5% or 0.05 in this
case), then accept the null hypothesis.
If the p-value is less than the
significance level, then reject the null
hypothesis
 Statistics Review
Minitab Exercise 2 – Mean with Known Variance or Large
Sample Sizes
Histogram of Press Force
(with Ho and 95% Z-confidence interval for the Mean, and StDev = 10)

2.0

1.5
Frequency

1.0

0.5

0.0 _
X
Ho
240 245 250 255 260 265 270 275
Press Force
 Statistics Review
The p-value
The p-value is the probability of getting the value of your test statistic
or larger
If the p is low, the null must go
How low? If p < a, reject the null hypothesis, thereby declaring
significance
If p  a, there is insufficient evidence to declare significance,
therefore the null hypothesis is not rejected
The level of significance, a, must be declared prior to the execution
of an experiment/study/protocol

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 Statistics Review
The p-value
What about p-values close to the a-value, or confidence bounds just
on either side of the test value?
1

Reject the ??????? Do not

Comfort level
null reject the
in making the
null
correct decision
to reject the null
or not

0
0 a 1.0
p-value
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 Statistics Review
“The Lady Tasting Tea” by David Salsburg
What is the correct value for a?
Sir Ronald Aylmer Fisher came closest to defining a specific p-value
that would be significant in all circumstances in 1929
“It is common practice to judge a result significant, if it is of such a
magnitude that it would have been produced by chance not more
frequently that once in twenty trials.”
– i.e. 1/20 or 0.05
“This is an arbitrary, but convenient, level of significance for the
practical investigator,…”
It is believed that Fisher used p-values to reach one of three
conclusions:
– If p < 0.01, a significant effect has been shown
– If p > 0.20, if there is an effect, it is so small that no experiment of this
size will be able to detect it
– If the 0.01 < p < 0.20, design the next experiment to get a better idea of
the effect 129
 Statistics Review
Hypothesis Test – Mean with Unknown Variance or n < 120
Ho: μ = μo

HI: μ ≠ μo

Test statistic:
t0 
 X   0

s n
Rejection region: to < -tα/2, n-1 or to > tα/2, n-1

130
 Statistics Review
Small Sample Sizes – Example
A manufacturer specifies that the impact strength of a plastic must
equal 250 ft lbs/sq inch. A new supplier submits the following impact
data from a random sample of their brand of plastic:
– 261 275 242 251 254 249 268

Would this supplier's plastic meet the manufacturer's requirement at

a 5% significance level?

Ho: μ = 250
HI: μ ≠ 250

131
 Statistics Review
Small Sample Sizes – Example
From our sample data:

Rejection region: Reject Ho if to < -tα/2, n-1 or to > tα/2, n-1

132
 Statistics Review
Small Sample Sizes – Example
Using α = 0.05
t0.025, 6 = 2.447, therefore, we cannot reject the hypothesis.

t=1.63

Cannot Reject
ta=2.447

Since to is not in the rejection region, we do not reject Ho. There is

no statistically significant difference between the stated mean value
of 250 and the sample mean value of 257.1.

133
 Statistics Review
Minitab Exercise – Mean with Unknown Variance or Small
Sample Sizes
Open the file “Topic02PressForce.MTW”
Select Stat  Basic Statistics  1-Sample t
– Select “One or more samples, each in a column” from the drop down menu
– Click in the blank window below the drop down menu to see a list of available
variables to analyze in the window on the left
– Double click on “C1 Press Force” to select it as the variable(s) to analyze
– Check the “Perform hypothesis test” box
Enter 250 in the “Hypothesized mean” window
– Click the Options button
Make sure the “Confidence level” is 95.0 and that “Mean  hypothesized mean”
(for a two-sided test) is selected in the “Alternative hypothesis” drop down box
Click OK
– Click the Graphs button
Check the “Histogram” box
Click OK
– Click OK
 Statistics Review
Minitab Exercise – Mean with Unknown Variance or Small
Sample Sizes
Statement of Null and Alternate Hypotheses

One-Sample T: Press Force

Test of μ = 250 vs ? 250

Variable N Mean StDev SE Mean 95% CI T P

Press Force 7 257.14 11.51 4.35 (246.50, 267.79) 1.64 0.152

95% confidence interval t-value of 1.64 is within the do not reject

includes the hypothesized
value of 250, we therefore do
not reject the null hypothesis.
region between –2.447 and +2.447.
Alternately, the p-value is not less than the
a-value of 0.05.
Either way, the null hypothesis is not
rejected.
 Statistics Review
Minitab Exercise – Mean with Unknown Variance or Small
Sample Sizes
The histogram helps visualize the interpretation:
Histogram of Press Force
(with Ho and 95% t-confidence interval for the mean)

2.0

1.5
Frequency

1.0

0.5

0.0 _
X
Ho
240 245 250 255 260 265 270 275
Press Force

Try the exercise again but adjust the confidence level.

 Statistics Review
Hypothesis Test – Variance
Ho: 2 = (o)2

HI: 2 ≠ (o)2

 2

n  1s 2
Test statistic:
 2


Rejection region: Reject Ho if   1a 2, n 1 2  a2 2, n 1

2 2
or

137
 Statistics Review
Hypothesis Test – Variance Example
Satisfied that the new supplier of plastic has a mean impact strength
of 250 ft lbs/sq inch, he is now interested in testing to see if the
variance meets his requirement of 25 (ft lbs/sq inch)2.

Test this hypothesis using the previously supplied data at a 5% level

of significance:
– 261 275 242 251 254 249 268

Ho: 2 = 25

HI: 2 ≠ 25

138
 Statistics Review
Hypothesis Test – Variance Example
From our sample data:

Reject Ho if  2
   2
1a 2, n 1 or 2  a2 2, n 1

139
 Statistics Review
Hypothesis Test – Variance Example
Using α = 0.05

02.975,6  1.237 02.025,6  14.45

Since 31.80 > 14.45, we reject the null hypothesis.

Since 31.80 is far out in
the right rejection region,
we reject Ho. There is
sufficient evidence to
Cannot Reject suggest that the sample
variance of 132.48 is
1.237 14.45 31.80
significantly larger than
the hypothesized
variance of 25 at a 5%
test level.
140
 Statistics Review
Minitab Exercise – Variance
Open the file “Topic02PressForce.MTW”
Select Stat  Basic Statistics  1 Variance
– Select “One or more samples, each in a column” from the drop down
menu
– Click in the blank window below the drop down menu to see a list of
available variables to analyze in the window on the left
– Double click on “C1 Press Force” to select it as the variable(s) to
analyze
– Check the “Perform hypothesis test” box
Select “Hypothesized variance” from the drop down list and enter 25 for the
“Value”
– Click on the Options button
Make sure the “Confidence level” is 95.0 and that “Variance  hypothesized
variance” is selected in the “Alternative hypothesis” drop down box
Click OK
– Click OK.
 Statistics Review
Hypothesis Test – Variance – Minitab Example
Minitab output
Test and CI for One Variance: Press Force
Method
Null hypothesis σ-squared = 25
Alternative hypothesis σ-squared ? 25

The chi-square method is only for the normal distribution.

The Bonett method is for any continuous distribution. 95% confidence
Statistics interval does not
Variable N StDev Variance contain hypothesized
Press Force 7 11.5 132
variance of 25
95% Confidence Intervals
CI for CI for
Variable Method StDev Variance
Press Force Chi-Square (7.4, 25.3) (55, 642)
Bonett (6.5, 28.3) (42, 803)
p-value for the test is
Tests
Test < 0.05, there the null
Variable Method Statistic DF P-Value
Press Force Chi-Square 31.79 6 0.000 hypothesis is rejected
Bonett — — 0.012
 Statistics Review
Hypothesis Test – Proportions
H o : p = po

H I: p ≠ po

Test statistic: Z 0
 pˆ  p0  p^ = x/n where x is the number of
p 1  p  “successes” (often the number
of defects found) in n trials.
n
Rejection Region: Reject Ho if Zo < -zα/2 or Zo > zα/2

143
 Statistics Review
Hypothesis Test – Proportions Example
A manufacturer of car doors needs to test the hypothesis that the
fraction of defective units is 10%. A random sample of 100 doors
resulted in 15 defective units.

Test the null hypothesis that p0 = 0.10 at a 5% significance level.

Ho: p = 0.10
HI: p ≠ 0.10

x = 15, so p^ = 15/100 = 0.15.

144
 Statistics Review
Hypothesis Test – Proportions Example
From the sample data:

Reject Ho if Zo < -Zα/2 or Zo > Zα/2

Using α = 0.05 Z0=1.67
– -Zα/2 = -1.96
Cannot Reject
– Zα/2 = 1.96
-Za/2=-1.96 Za/2=1.96

Since Zo is not in the rejection region, we do not reject Ho. There is

no statistically significant difference (5% level) between the stated
proportion defective units of 0.10 and the sample proportion of 0.15.

145
 Statistics Review
Minitab Exercise – Proportions
Select Stat  Basic Statistics  1 Proportion
– Click on Stat, Basic Statistics, 1 Proportion
– Select “Summarized data” from the drop down menu
Enter 15 for the “Number of events”
Enter 100 for the “Number of trials”
– Check the “Perform hypothesis test” box and enter 0.10 in the
“Hypothesized proportion” window.
– Click on the “Options” button.
Make sure the “Confidence level” is 95.0 and that “Proportion 
hypothesized proportion” is selected in the “Alternative hypothesis” drop
down box
Select “Normal approximation” for the “Method”
Click OK
– Click OK
 Statistics Review
Minitab Exercise – Proportions

Test and CI for One Proportion

Test of p = 0.1 vs p ? 0.1

Sample X N Sample p 95% CI Z-Value P-Value

1 15 100 0.150000 (0.080015, 0.219985) 1.67 0.096

Using the normal approximation.

If the confidence interval If the p-value is greater than the

contains the hypothesized
value, then accept the null
hypothesis.
significance level (5% or 0.05 in this
case), then accept the null hypothesis.
If the p-value is less than the
significance level, then reject the null
hypothesis