Question

1. Fidelity Investments is a Boston institution that is “among the most diversified financial services companies in the world, offering a full range of product solutions for individual investors, employers, institutions, and intermediaries. Fidelity has $6.8 billion in assets under administration, including managed assets of $2.4 billion, as of December 31, 2018”
   Fidelity operates service centers in various cities that customers can call to get answers to questions about their investments. Previously, the company studied the distribution of time required for each call. It found that calls are normally distributed, with a mean equal to 540 seconds. The call center manager in Provo, Utah, has selected a random sample of 50 calls and wants to determine whether the mean call time is now less than 540 seconds after a training program given to call center employees. She can test whether the time has decreased by using the following steps:
   1. Set up a hypothesis
   2. Set up a suitable significance level
   3. Determine a suitable test statistic
   4. Determine the critical region
   5. Perform computations
   6. Make decision to accept or reject hypothesis
2. Founded in 1846, Hood is a Charlestown company with more than $2 billion in annual sales. The company has 15 plants and uses filling machines for its gallon milk containers. There is some variation in the actual amount of milk that goes into the container. The machine can go out of adjustment and put a mean amount either less or more than one-gallon containers. To monitor the filling process, the production manager for the Sacramento plant selects a simple random sample of 16 gallons each day. He can test whether the machine is still in adjustment using the following steps:
   1. Set up a hypothesis
   2. Set up a suitable significance level
   3. Determine a suitable test statistic
   4. Determine the critical region
   5. Perform computations
   6. Make decision to accept or reject hypothesis
3. The August Brothers Oil Company is an oil delivery company based out of East Boston. The company has been in business for over 15 years. The company delivers home heating oil and does oil burner repairs. The company has an opportunity to invest its profits into either increasing its oil delivery business or oil burner repair business. Last year the company made a profit on average of 21 cents for every gallon of heating oil it sold, and $150.00 profit on every burner it repaired. How can you use hypothesis testing to test these two disparate operations and decide where to invest the company’s profit?

Reference

Answer 1

Here our decision criteria is change because of alternative hypothesis. First understand decision criteria for all different alternative hypothesis. If you provide sample data then it is easy to give you final result.