The Manager of a Local Specialty Store Is Concerned with a Possible

question 146

Short Answer

The manager of a local specialty store is concerned with a possible slowdown in payments by her customers.She measures the rate of payment in terms of the average number of days receivables are outstanding.Generally,the store has maintained an average of 50 days with a standard deviation of 10 days.A random sample of 25 accounts gives an average of 54 days outstanding with a standard deviation of 8 days.Calculate the appropriate test statistic to test the hypotheses.

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Definitions:

Significance Level

A threshold for determining whether a statistical result is considered statistically significant, usually denoted by alpha (α).

Statistical Inference

The process of drawing conclusions about population parameters based on data from a sample.

Descriptive Statistics

Statistical methods that summarize and describe the features of a collection of data, including measures of central tendency and variability.

Mean

The arithmetic average of a set of values or quantities, obtained by dividing the sum of all values by the number of values.