Example 1: A pharma company hypothesizes that the effect of a certain sedative is 13 hrs with a known standard deviation of 2 hrs.

From a sample of 16 patients, it is found that the sample mean to be 12 hrs. At 0.01 level of significance (1%), should the company conclude that the average effect of the sedative is less than or equal to 13 hrs.

Solution: Here 1. Null Hypothesis: Ho: 13, Alternative Hypothesis: Ha: >13. 2. Calculation of test statistics: Standard Error of mean: S.E.(mean) = / n = 2 /16 = 2/4 = = .5. 3. Test statistics: Z = x- / S.E.(mean) = 12-13/0.5 = -2. At 1% level, the critical value of Z for one tailed test is 2.33. 4. Decision: since the computed value is less than the table value, we accept Ho and conclude that the average effect of the sedative is less than or equal to 13 hrs.

Example 2: An automatic machine was designed to pack exactly 2.0 kg of vanaspati. A sample of 100 tins was examined to test the machine. The average weight was found to be 1.94 kg with Standard Deviation 0.10 kg. properly? Solution: Here 1. Null Hypothesis: Ho: = 2 Kg, Alternative Hypothesis: Ha: 2 Kg. Here is not known. 2. Calculation of test statistics: Standard Error of sample mean: S.E.(mean) = s/ n = .10 /100 =.01. 3. Test statistics: Z = x- / S.E.(sample mean) = 1.94 -2 /.01 = - 6. At 5% level, the critical value of Z for two tailed test is 1.96. 4. Decision: since the computed value is more than the table value, we reject Ho and conclude that the machine is not working properly. Is the machine working