September 2018
Intermediate to advanced
392 pages
10h 16m
English
Note
From a practical perspective, a significance level of p = 0.05 is often too strict
Imagine the following scenario. A study reports a 10 per cent lower rate of production-line errors in manufacturing companies that use a particular quality management model. The p-value for the difference in error rate (compared with companies that have not implemented the model) is 0.07. The common interpretation of this p-value is that there is a probability of 7 per cent that this outcome is due to chance. Now, imagine that every 1 per cent error decrease yields a profit increase of $50,000, which equates to a total sum of $500,000. Let’s also assume ...
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