Business Statistics

324 Business Statistics

Sample standard deviation (s) = 2618.61 and Sample mean

( ) 30x =

= 39,750

 = 40,000 and n = 8 and df = n – 1 = 8 – 1 = 7

The tabular t value is t

0.025, 7

= 2.365

The t formula for testing hypothesis is

39,750 40,000

0.27

2618.61

8

− −

= = = −

x

t

s

n



Step 7: Arrive at a statistical conclusion and business implication

The observed t value is –0.27 which falls in the acceptance region. Hence, null

hypothesis cannot be rejected (Figure 10.18). This implies that the evidence from

the sample is not sufcient to reject the null hypothesis that the population mean

(of average tyre life) is 40,000 km.

As discussed in Step 7, the ...