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Z TEST

PARMETERS WITH LARGE SAMPLES (>30)

POPULATION PARMETERS

WITH LARGE SAMPLES

large samples (n > 30)is based

on the assumption that the

population from which the

sample is drawn has a normal

distribution

Consequently the sampling

distribution of mean x is also

normal

POPULATION PARMETERS

WITH LARGE SAMPLES

Let o be the hypothesized value of the

population mean to be tested. For the null

hypothesis the null and alternative

hypothesis for two tailed test are defined as

Ho: = o

H1 : = o

If std deviation of population is known

Test statistic z = (x )/ x = (x )/( /n)

Then z = (x- )/(s/n)

POPULATION PARMETERS WITH

LARGE SAMPLES

means for the two tailed test

takes the form

Reject Ho if z(cal) -z(/2) or

z(cal)

z(/2)

Accept Ho if z(/2) < z <

z(/2)

where z(/2) is the table value of

z at a chosen level of

POPULATION PARMETERS WITH

LARGE SAMPLES

Large sample hypothesis testing

about a population mean for a left

tailed test is of the form

Ho : o and H1 : < o

Test Statistic z = (x )/x = (x )/

( /n)

Decision Rule

Reject Ho if z(cal) -z()

POPULATION PARMETERS WITH

LARGE SAMPLES

Large sample hypothesis testing

about a population mean for a

right tailed test is of the form

Ho : o and H1 : > o

Test Statistic z = (x )/x = (x

)/( /n)

Decision Rule

Reject Ho if z(cal) z()

EXAMPLE 1

An ambulance service claims

that it takes on average 8.9

minutes to reach its destination

in emergency calls. To check the

claim the agency which licenses

ambulance services has then

timed on 50 emergency calls,

getting a mean of 9.3 minutes

with a std deviation of 1.8

minutes. Does this constitute

evidence that the figure claimed

EXAMPLE 1-Solution

Let us consider the null

hypothesis Ho that the claim is

same as observed

Ho:=8.9 , H1: = 8.9

Given n=50,x=9.3 ,s=1.8

Z=(x-) /sx = x-/(s/n) =

(9.3-8.9)/(1.8/

50)=1.574

Since z(cal) is less than critical

value z(/2)= 2.58 the null

Example 2

A hospital uses large quantities of

packaged doses of a particular drug.

The individual dose of this drug is

100 cc. The action of this drug is

such that body will harmlessly pass

off excessive doses. On other hand

insufficient doses do not produce

desired medical effect. The hospital

has purchase the drug from the same

manufacturer for years and

Example 2

The hospital inspects 50 doses of this

drug at random and finds a mean of

99.75 cc

If a hospital sets a significance level

of 0.10 and asks whether the dosage

is too low how can we find this.

Example 2 - Solution

To begin we can state this problem as

Ho:o = 100: H1 : 1 = 100

The hospital wishes to know

whether actual dosage are 100cc or

whether in fact the dosage are too

small

A better way would be

Ho: o 100 , H1 : 1 < 100

Z=(x-) /x = 99.75 100 / 2 50 = - 0.88

Example 2 - Solution

The critical value of z is -1.28 and

therefore we accept null hypothesis

EXAMPLE 3

A packaging device is set to fill detergent

powder packets with a mean weight of 5 kg,

with a standard deviation of 0.21 kg. The

weight of packets can be assumed to be

normally distributed.

The weight of packets is known to drift

upwards over a period of time due to

machine fault which is not tolerable. A

sample of 100 packets is taken and

weighed. This sample has a mean weight of

5.03 kg. can we conclude that the mean

weight produced by the machine has

increased? Use a 5 % level of significance

EXAMPLE 3-Solution

Let null hypothesis Ho that mean weight has

increased

Ho : 5 and H1 : < 5

Given n=100, x=5.03 kg, =0.21, = 5%

Z= (x- ) / (/n) = 5.03-5 /(0.21/100) =

1.428

Since calculated value z(cal) = 1.428 is less

than its critical value z() =1.645 at =

0.05, the null hypothesis Ho is accepted

Hence we conclude that mean weight is

likely to be more than 5 kg

POPULATION PARMETERS

WITH LARGE SAMPLES

DIFFERENCE BETWEEN TWO

POPULATION MEANS

Idea is to test whether there is

significant difference between

the means of these populations

Let 1 and 2 be mean of two

population

1 and 2 be std deviation of two

population

POPULATION PARMETERS WITH

LARGE SAMPLES

= [(x1-x2) (1-2)]/ (/n1 +

/n2)

The null and alternate hypothesis are stated

as Null hypothesis

Null Hypothesis Ho : 1 2 = do ( do is

specified difference)

Two tailed test

One tailed test

Alternate

hypothesis

Ho:

(1 2)

= do Ho : 1-2 0

where do is the

(1 2) > do

specified

H0 : 1 -2 0

difference that is (1 2) < do

desired to be

H1 :

H1 :

POPULATION PARMETERS WITH

LARGE SAMPLES

Decision Rule

Reject Ho at a specified level of

significance

when

tailed

Tailed Test

Two

One

test

Z(cal)>z(/2)

or

z(cal) <z(/2)

do

[note : if standard

standard error by substituting the

sample deviations s1 and s2 as

EXAMPLE 4

A firm believes that the tyres produced

by process A on an average last longer

than tyres produced by process B. To

test this belief, random supplies of

tyres produced by the two processes

were tested and the result are

Proce

ss

Sample size

Average

lifetime(k

m)

Standard

deviation(

km)

50

22400

1000

50

21800

1000

significance that the firm is correct in

its belief?

EXAMPLE 4-Solution

Let us take the null hypothesis that

there is no significant difference in the

average life of tyres produced by

processes A and B

Ho : 1=2 or 1-2 = 0

H1 : 1=2

Given x1 = 22400, x2 =21800

1 =2=1000, n1=n2=50

Z= [(x1-x2) (1-2)]/ x1 x2

= [(x1-x2) (1-2)]/( /n1 + /n2 )

EXAMPLE 4-Solution

= 22400 21800 / ((1000)/50 +

(1000)/50)

= 600/ ( 20000+20000)

= 600/200=3

Since the calculated value z(cal )=3 is

more than its critical value z (/2) =

1.645 at

= 0.5 level of

significance therefore Ho is rejected

Hence we conclude that the tyre produced

by process A last longer than that of B

POPULATION PROPORTION

POPULATION PROPORTION

p=No of successes in sample/sample

size=x/n

po: The value of the above statistic is

compared with hypothesized

population proportion po to arrive at a

conclusion

The three forms of null hypothesis

and alternative hypothesis pertaining

Null Hypothesis

Hypothesis

to the hypothesizedAlternative

population

Ho: p = po

p = po ( two tailed

proportion p are as H1:

follows

test)

Ho :p po

test)

POPULATION PROPORTION

Test statistic z = p-po/p

= p-po /po(1po)/n

Decision Rule: Reject Ho when

Two tailed test

Z(cal) > z() (when H1: p Z (cal) > z(/2)

> po)

or

or

Z (cal) < - z(/2)

Z(cal) < - z() (When

H1 :p< po)

EXAMPLE 5

An auditor claims that 10% of

customers ledger accounts are

carrying mistakes of posting and

balancing. A random sample of

600 was taken to test the

accuracy of posting and

balancing and 45 mistakes were

found .Are these samples results

consistent with the claim of the

auditor? Use 5% level of

EXAMPLE 5 -Solution

Let us take the claim of auditor

is valid

Ho: p=0.10 H1 : p= 0.10 (two

tailed test)

Given p=45/600 =0.075,

n=600 ,=5%

Z=p-po/p = 0.075 -0.10 /

(0.10x0.90/600)

= - 2.049

Since z(cal) is less than critical

Example 6

A manufacturer claims that at

least 95% of the equipments

which he supplied to a factory

conformed to specifications. An

examination of sample of 200

pieces of equipment revealed

that 18 were faulty. Test the

claim of the manufacturer

Given critical value z()= -1.645

at 5% level of significance

Example 6 - Solution

Let us take null hypothesis that at

least 95 % of equipment supplied

conformed to specification

Ho: po 0.95 H1 :po< 0.95(left

tailed test)

Given p = 1-(18/200) = 0.91, n=

200, = 0.05

Z=p-po/p = 0.910.95/(0.95x0.05)/200 = -2.67

Since z(cal) is less than critical

BETWEEN TWO POPULATION PROPORTIONS

DIFFERENCE BETWEEN TWO

POPULATION PROPORTIONS

proportion and standard deviation of an

attribute be as follows

Populatio Proportion Standard

n

Deviation

1

p1

p1

2

p2

p2

The hypothesis testing concepts developed can

be extended to test whether there is any

difference between the proportions of these

populations. The null hypothesis that there is no

difference between two proportions is stated as

DIFFERENCE BETWEEN TWO

POPULATION PROPORTIONS

Ho : p1=p2 or p1-p2 =0

H1 : p1 = p2

H1 : p1 > p2

H1 : p1 < p2

sample proportions p1-p2 is based on the

assumption that the difference between

two population proportions p1-p2 is

normally distributed.

The standard error of p1-p2 is given by

p1-p2=p1(1-p1)/n1 + p2(1-p2)/n2

[q1=1-p1, q2=1-p2]

DIFFERENCE BETWEEN TWO

POPULATION PROPORTIONS

The z statistic is

Z=(p1-p2) (p1-p2) / p1-p2

= (p1-p2/p1-p2)

Invariably the standard error p1-p2 is not

known. Thus when a null hypothesis states

there is no difference between the

population proportion we combine

proportions p1 and p2 to get one unbiased

estimate of population proportion

p = n1p1 +n2p2/ (n1 + n2)

Z= p1-p2/sp1-p2

[ sp1-p2 = p(1-p) {1/n1+1/n2}

Example 8

advertisement for promotion of new product.

Management believes that advertisement A is

more effective than advertisement B. Two test

market areas with virtually identical consumer

characteristics are selected.

Ad A is used in one area and Ad B is used in

other area. In a random sample of 60

customers who saw advertisement A , 18 had

tried the product. In random sample of 100

customers who saw ad B ,22 tried the product.

Does this indicate ad A is more effective than

Ad B if a 5% level of significance is used

Given critical value z()= 1.645 at 5%

significance

Example 8-Solution

Let us take null hypothesis both

Ad are equal

Ho: p1=p2 H1 : p1 > p2 (right

tailed test)

Given n1=60, p1=18/60=0.30, n2=

100, p2=22/100= 0.22, =0.05

Z= p1-p2/sp1-p2

Sp1-p2=p(1-p)[1/n1+1/n2]

= 0.25x0.75(1/60+1/100) =

0.707

Example 8-Solution

Substituting value in z test

statistic

z= 0.30- 0.22/0.0707 =

0.08/0.0707 =1.131

Since z(cal) is less than critical

value z()= 1.645 , Ho is accepted

Example 9

In a simple random sample of

600 men taken from a big city

400 are found to be smokers. In

another random sample of 900

men taken from another city are

450 smokers. Do the data

indicate that there is a

significant difference in habit of

smoking in the two cities?

Example 9 - Solution

Let us take the null hypothesis

that there is no significant

difference in the habit of

smoking in two cities

Ho: p1=p2 H1 : p1 = p2 (two

tailed test)

Given n1=600,

p1=400/600=0.667, n2= 900,

p2=450/900=0.50, =0.05

Z= p1-p2/sp1-p2

Example 9-Solution

[p=n1p1+n2p2/n1+n2

=600(400/600) +

900(450+900)/ (600+900)

=450 +450 /1500 =

850/1500=0.567 ]

Z= 0.667-0.500/0.026 = 0.167/0.026

=6.423

Since z(cal) =6.423 is greater than z

(/2) =2.58 at /2=0.025 Ho is rejected.

Hence we conclude there oi no

significant difference in habit of

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