The Supervisor of an Automobile Sales and Service Industry Would

question 30

Essay

The supervisor of an automobile sales and service industry would like the variance of the number of automobiles serviced not to exceed five units-squared. He would recruit one more service executive if the variance exceeds this threshold. In a recent random sample of 14 services, he computed the sample standard deviation as 3.3. He believes that the automobile services are normally distributed.
A) State the null and the alternative hypotheses to test if the threshold has been crossed.
B) Use the critical value approach to conduct the test at α = 0.01.
C) What should the supervisor do?

• A) State the null and the alternative hypotheses to test if the threshold has been crossed.
• B) Use the critical value approach to conduct the test at α = 0.01.
• C) What should the supervisor do?

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Definitions:

Salary

The amount of regular payment from an employer to an employee, typically expressed as an annual sum and paid in monthly or biweekly intervals.

Hourly Wage

The amount of money paid to an employee for each hour of work.

Commission

A fee or percentage of a sale paid to a salesperson, broker, agent, or other individual for their services in facilitating a transaction.

Material Safety Data Sheets

Documents that provide information on the properties of chemical products regarding their hazards, handling, and safety measures.