Question

Austin is a human resources executive for a technology company. He is deciding between two types of plans for vacation allowance for the employees of the company: Unlimited and Traditional, Austin wants to deterrine, for workers in the tech Industry, if the yearly mean number of vacation days taken by workers with an Unlimited plan is greater than the yearly mean number of vacation days taken by workers with a Traditional plan Austin surveys a random sample of 17 workers who have the Unlimited plan and a random sample of 15 workers who have the Traditional plan. (These samples are chosen independently.) For each worker, he records the number of vacation days taken last year. For the workers with an Unlimited plan, the sample mean is 18.9 with a sample variance of 30.8. For the workers with a Traditional plan, the sample mean is 17.4 with a sample variance of 6.1 Assume that the two populations of vacation days taken are approximately normally distributed. Can Austin conclude, at the 0.10 level of significance, that the population mean of the yearly number of vacation days taken by workers with an Unlimited plan is greater than the population mean of the yearly number of vacation days taken by workers with a Traditional plan? Perform a one-talled test. Then complete the parts below. Carry your intermediate computations to three or more decimal places, (If necessary, consult a list of formulas.) (*) State the null hypothesis and the alternate hypothesis (a) Determine the type of test statistic to use (a) state the null hypothesis H, and the alternate hypothesis (b) Determine the type of test statistic to use. (c) Find the value of the test statistic (Round to three or more decimal places.) (d) Find the critical value. (Round to three or more decimal places) (e) At the 0.10 level of significance, can Austin conclude that the yearly mean number of vacation days taken by workers with an Unlimited plan is greater than the yearly mean number of vacation days taken by workers with a Traditional plan?

Answer 1

The question requires that we have to state the hypothesis:

null hypothesis;H0: u1 < u2, the alternate hypothesis;H1: u1 > u2. The one tail test is what is to be used.

A. How to state the hypothesis

H0: u1 < u2

H1: u1 > u2

The one tail test statistic is what is to be used here

B. standard error

$\sqrt{\frac{30.8}{17} +\frac{6.1}{15} }$

= 1.49

The df = 17 + 15 - 2

= 30

test statistic = 18.9 - 17.4 / 1.49

= 1.007

We have the critical value on excel as T.INV(0.9,30)

=  1.310

E. At 0.1, we can conclude that  t-value (1.007) does not lies in the rejection area. We fail to reject the null hypothesis. Hence we conclude that the mean vacation with the unlimited plan is greater.

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