MBA 6018 Unit 3 Assignment 1.DOC

MBA 6018 Unit 3 Assignment 1

UNIT 3 Content

In this unit, you will examine how managers use hypothesis testing and statistical techniques to evaluate the likelihood of an assertion. Hypothesis testing is at the core of inferential statistics. It is the foundation of the inferential statistics used to help managers make better decisions. A typical managerial decision using hypothesis testing would be to compare samples of purchased products, to ensure they conform to firm quality standards. In fact, sampling itself is a particularly useful data analysis technique. Malls and stores often sample prospective customers. So do retail fast food franchises—take a look at the bottom of your receipts the next time you purchase something.

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Unit Resources
Suggested Resources

The following optional resources are provided to support you in completing each assessment. They provide helpful information about the topics in this unit. For additional resources, refer to the Research Resources and Supplemental Resources in the left navigation menu of your courseroom.


Textbook: You may wish to refer to the How Do I Find Books? library guide to explore options for acquiring this resource free of charge, or you may wish to purchase it from your preferred retailer.

Capella University (Eds.). (2011). MBA6018 – Data analysis for business decisions [Custom textbook]. New York, NY: McGraw-Hill. ISBN: 9780697804624.
Note:This custom textbook is available for purchase from the Capella University Bookstore. It contains a selection of readings originally published by McGraw-Hill in other contexts.


Sophia: For this unit, you are encouraged to study the following tutorials: (Producer). (2012). Independent and dependent samples [Video]. Available from
For an accessible version of this tutorial, click Transcript.


Click the link provided below to view the following multimedia piece:

Hypothesis Tester – An Introduction.
Course Library Guide

A Capella University library guide has been created specifically for your use in this course. You are encouraged to refer to the resources in the MBA-FP6018 – Data Analysis for Business Decisions Library Guide to help direct your research.

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Questions to Consider

As you complete the assessment work in this unit, you may find it helpful to consider the questions below. You are encouraged to discuss them with a fellow learner, a work associate, an interested friend, or a member of the business community, in order to deepen your understanding of the topics.

Why is it important that a sample be random?
For its validity, all hypothesis testing depends heavily on the assumption that the sample that is used was drawn using probability sampling techniques. Why is this important?
What can you do if you just cannot use a probability sampling technique? (For example, suppose there is no good sampling frame available for the population of interest.)

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[u03a1] Hypothesis Testing 1 Assessment Description

Assessment Context

By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:

  • Competency 3: Analyze business decision opportunities using basic inferential statistics.

  • Determine the null hypothesis and alternative hypothesis for making decisions regarding product pricing.

  • Compute the appropriate statistical test to determine acceptance or rejection of a null hypothesis.

  • Competency 5: Integrate data analysis into general business management planning and decision-making.

  • Compute the p-value to indicate acceptance or rejection of a null hypothesis regarding average customer spending.

  • Competency 6: Communicate in a manner that is professional and consistent with expectations for members of the business professions.

  • Communicate in a manner that is professional and consistent with expectations for members of the business professions.

Assessment Instructions
This assessment will allow you to demonstrate practical application of hypothesis testing to making business decisions in a given scenario. Use the Hypothesis Tester – Single Sample file, linked in the Assessment Resources, to complete the calculations for this scenario. You may also refer to the Hypothesis Tester media piece in your Unit Resources to review the process for computing this equation.

Practical Application Scenario

In 2010, Playbill Magazine, a regionally based magazine, consulted Boos Allen to determine the mean annual household income of its readers. Using a list of customers provided by Playbill, Boos Allen randomly sampled 300 Playbillcustomers. From that sample, Boos Allen is confident that the average Playbill reader's household income is $119,155, with a population sample household income standard deviation of $30,000.

Recently, two Playbill executives suggested that the mean average household income for Playbill'sreaders has increased, and the magazine price should be raised. As Playbill's new marketing manager, you convince Playbill's chief operating officer to complete a second survey with Boos Allen, to confirm that assertion. Yesterday, the new Boos Allen report appeared on your desk. From a new sample of Playbillcustomers, taken from a list of recent customers you e-mailed to Boos Allen, the 2012 Playbill customer profile shows a mean annual household income of $124,450, with a population standard deviation of household income unchanged at $30,000.

You realize that even though you do not have the Playbillreader population's standard deviation, you do have enough data to perform a one-sample hypothesis test. In order to choose the correct statistical tool to complete this assessment, consider the following questions:

  • What do you know about the population being studied (for example, do you know the standard deviation of the overall population)?

  • What do you know about the population sample you chose (for example, which sample statistical parameters do you have, such as mean, standard deviation, variance, and so on)?

Solve the following equations, based on the data from the Hypothesis Tester – Single Sample file, linked in the Assessment Resources. Demonstrate your method and display your results in table format, using Excel or another appropriate computer application.

  • Identify the null hypothesis, via both a written explanation and a math equation.

  • Determine the alternative hypothesis, via both a written explanation and a math equation.

  • Solve the equation to determine whether to accept or reject the null hypothesis.

  • Determine whether the p-value indicates acceptance or rejection of the null. Use alpha = .05.

Next, address the following:

  • Write a three-sentence paragraph that details your recommendations for a course of action, based on your results.

  • Report the rejection or acceptance of the null, in terms of the scenario results.

  • Explain why you can be statistically confident that the mean household Playbillreader's income has increased, decreased, or remains the same.

  • Would you propose the cost of the magazine be raised?

  • What would happen if alpha was .01?

Compile your work into one Microsoft Word file, pasting in the tables you used to make your calculations. Be sure to clearly title your tables, including each row and column. Highlight the results of your data calculations within the tables.
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