Business Statistics

Chapter 13 | Hypothesis Testing for Categorical Data (Chi-Square Test) 449

So,

2

2

( )

3.43

o e

e

f f

f

χ

−

= =

∑

Step 7: Arrive at a statistical conclusion and business implication

At 95% condence level, the critical value obtained from the table is

2

0.05, 7

14.0671χ =

. The calculated value of c

2

statistic is 3.43, which is less than

the tabular value and falls in the acceptance region. Hence, the null hypothesis is

accepted and the alternative hypothesis is rejected.

There is enough evidence to indicate that sales are uniformly distributed over

the years. So, the retail store can place orders and plan inventory accordingly.

The data in T