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# IE 28

## Statistical Analysis for Industrial Engineers

11.11.2010

Agenda
Review of Type I and Type II errors
2. Use of p-value (versus conventional test of hypothesis)
3. Exercises
1.

Statistical Hypothesis

Definition
Statistical definition
an assertion about the distribution of one or more random

variables
an assertion about the parameters of a distribution or a model.
It is a statement that needs to be proven or disproven
Two types of statistical hypotheses:
Simple completely specifies the distribution
Composite does not completely specify the distribution

Hypothesis Testing
A test of statistical hypothesis is a rule which when the

## experimental values have been obtained, leads to a decision

to reject or not reject the hypothesis under consideration
The critical region, C, is that subset of the sample space

## which leads to the rejection of the hypothesis under

consideration
The construction and choice of this critical region are what

## Steps on Hypothesis Testing

1. State null and alternative hypothesis
2. Choose and compute for the test
statistic
3. Determine critical area/acceptance
region
4. Compare test statistic and critical
region to make conclusion

Example
Suppose that X, is a random variable, an outcome of a random

experiment

## We want to test if a pack really weighs 50g as said in the wrapper

Example
The random experiment is the M&M pack with X denoting

its weight.
We assume that X is normally distributed
0

= 2.5

## In our test, we would accept it as 50 grams when it goes in

this interval
(48.5, 51.5)

Example
Null Hypothesis

Alternative Hypothesis

pack is 50 grams
= 50

50

Definition
Type I Error

Type II Error

## Failure to reject the

Hypothesis when it is
true
Alpha()

## null hypothesis when it

is false
Beta()
Power of the Test (1- )
Probability of rejecting

H0 when it is false

## Properties of Type I and Type II Error

A decrease in the probability of on error
generally results an increase in the
probability of the other
The size of the critical region, and therefore

## the probability of committing a type I error,

can always be reduced by adjusting the
critical values

## Summary of Type I and Type II Errors

Possible situations in Testing a Statistical
Hypothesis

M&Ms Example
Situation

Conclusion from
the Experiment

## Weight of the packs is

Weight of the packs is 50g
50g
Weight of the packs is
not 50g
Weight of the packs is
Weight of the packs is 50g
not 50g
Weight of the packs is
not 50g

Type of
Conclusion
Correct
Type I error
Type II error

Correct

## Computation for Type I Error

M&Ms Example
Suppose that we are getting 10 M&Ms packs to test if our

## hypothesis is correct or not.

What is the Type I Error?

What if
We widen the
We increase our
acceptance region sample size to 16
to (48, 52)
What will be the

Type I error?

Type I Error?

## Insights on Type I Error

We could reduce the Type I Error value by

## Widening the acceptance region

Increasing the sample size

## Computation for Type II Error

M&Ms Example
We use the new acceptance region (48,52)
What if the weight of the pack is really 52g and not 50g
The variance is still the same.
Sample Size is still 10

What if
What if the weight of the pack is really 50.5g and not

50g
The variance is still the same.
Sample size is 16

Take Note
1 -

## Power of the Test

Probability of rejecting the null hypothesis

## H0 when the alternative hypothesis is true

Measure of the sensitivity of a statistical
test

## Summary of all the parameters for the

M&Ms Example

Type I Error is related to the rejection region

## (area on the fringes)

Type II Error is related to the acceptance

## region (area inside)

It would be impossible to compute Type II error

## without a specific alternative (being true)

P-values

Definition
Smallest level of significance that would lead to the

## rejection of the null hypothesis with the given data

Lowest level of significance at which the observed

## value of the test statistic (TS) is significant

Present convention require the pre-selection of the

## level of significance (5%, 1%) and choosing the

critical region accordingly

## Steps in Test of Hypothesis: P-values

1. State null and alternative hypothesis

## 2. Choose and compute for the test

statistic
3. Compute p-value based on the test
statistic
4. Use judgement to conclude based on
the p-value

If p-value >
Do not reject H0

If p-value

If p is low,
make it go

Reject H0

## Watch out for marginal cases

Note: Most statistical software refers to p-values

More on p-values
P-values are actually difficult to
compute except for the standard
normal distribution (Z)
P-values inform us how well the TS falls
into the critical region
Using the P-values preclude the need to
determine a level of significance

Example
Consider the case of a two tailed test with
= 5%
H0 : = 50
critical value: Z/2=

Test
Sample size = 16
Sample Standard deviation = 4
Sample Mean = 51.9

## What is the p-value?

In Perspective

Critical Region

Exercises

Problem 1
Suppose and allergist wishes to test the
hypothesis that at least 30% of the
public is allergic to some cheese
products. Explain how the allergist
could commit
Type I Error
Type II Error

Problem 2
A sociologist is concerned about the effectiveness

## of a training course designed to get more drivers

to use seatbelts in automobiles.
What hypothesis is she testing is she commits a
type I error by erroneously concluding that the
training course is ineffective?
What type of hypothesis is she testing if she
commits a type II error by erroneously
concluding that the training course is effective?

Problem 3
The proportion of adults living in a small town who are

## college graduates is estimated to be p=0.6. to test this

hypothesis, a random sample of 15 is selected. If the
number of college graduates in our sample is anywhere
from 6 to 12, we will fail to reject the null hypothesis
that p=0.6; otherwise we shall conclude that p is not
equal to 0.6.
Evaluate assuming p=0.6, using the binomial
distribution.
Evaluate for the alternatives p=0.5 and p=0.7. what
about if p=0.59. What does this show?

Problem 4
Repeat the previous exercise when 200
adults are selected and the acceptance
region is defined to be 110<x<130
where x is the number of college
graduates in our sample. Use the
normal to binomial distribution.

Problem 5
A random sample of 400 samples in a certain city asked

## if they favor an additional 4 gasoline sales tax to provide

badly needed revenues for street repairs. If more than
220 but fewer than 260 favor the tax, we shall conclude
that 60% of the voters are for it.
Find the probability of committing a type I error if
60% of the voters favor the increased tax.
What is the probability of committing a type II error
using this test if actually only 48% of the voters are in
favor of the additional gasoline tax.

Problem 6
A consumer products company is formulating a new

## shampoo and is interested in foam height (in millilitres).

Foam height is approximately normally distributed and
has a standard deviation of 20 millilitres. The company
wishes to test H0: = 175 mL versus H1: > 175mL,
using the results of 10 samples.
Find the type I error probability, if the critical region is
x > 185mL
What is the probability of Type II error if the true
mean foam height is 195mL?

HOMEWORK

Montgomery

9-6
9-8
9-15
9-19

fin