Objective: Construct simple hypothesis tests for means and proportions.

Introduction:

A potato chip company packages its potato chips into 12.0 ounce bags. You find it hard to believe that the bag contains enough potato chips to weigh 12.0 ounces and would like to make an official complaint. Before doing so, you decide to run an experiment so that you can have some confidence that the company’s claim is incorrect. Over the next several months you buy 30 bags of potato chips and weigh the contents of each one. You discover that the mean weight is 11.9 ounces with a standard deviation of 0.4 ounces. You decide that you will only complain if you can be 95% sure that the bags do not contain at least 12.0 ounces of potato chips. You decide to construct a hypothesis test.

Task:

1. Determine if this is a one-tailed or two-tailed test. Justify your decision.
2. State the null hypothesis and alternative hypothesis, including the parameters on both statements. Your null hypothesis should assume the company’s claim is correct.
3. In a discussion of type I errors, do the following:
   1. Define the term type I error.
   2. Explain what a type I error is in terms of this problem.
4. In a discussion of level of significance, do the following:
   1. Define the term level of significance.
   2. Identify the level of significance for this problem.
5. Calculate the test statistic as a z-score by using the z-test formula. Show all relevant work.
6. Using a standard table, you determine that the critical value is –1.645.
   1. Determine if the test statistic allows you to reject the null hypothesis.
   2. Explain how you reached this conclusion, including a comment relating the results to the original problem.

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Solution: The downloadable solution consists of 4 pages, 566 words and 9 charts.
Deliverable: Word Document