The Manager of a Video Library Would Like the Variance

question 22

Multiple Choice

The manager of a video library would like the variance of the waiting times of the customers not to exceed 2.30 minutes-squared. He would like to add an additional billing counter if the variance exceeds the cut-off. He checks the recent sample data. For a random sample of 24 customer waiting times, he arrives at a sample variance of 3.8 minutes-squared. The manager assumes the waiting times to be normally distributed. Which of the following would be null and the alternate hypothesis to test if the cut-off is surpassed?

• A) Η₀: σ² ≤ 2.3, Η_A: σ² > 2.3.
• B) Η₀: σ² = 2.3, Η_A: σ² ≠ 2.3.
• C) Η₀: σ² ≥2.3, Η_A: σ² < 2.3.
• D) Η₀: σ² < 2.3, Η_A: σ² ≥ 2.3.