In: Statistics and Probability
A financial management consultant samples 580 outlets of a large fashion label and calculates monthly expenses to average $13,540 with a standard deviation of $2,800. A competing consultant reads the report and claims the outlets have exceeded the amount budgeted for, which was expected to be $12,700. The test statistic is given to be= 7,225. Conducting a suitable hypothesis test to examine the competing consultant's claims, were expenses higher on average than budgeted for? Explain?
Assuming alpha = 0.05
(5) Conclusion
It is concluded that the null hypothesis Ho is rejected. Therefore, there is enough evidence to claim that expenses higher on average than budgeted for at the 0.05 significance level.