Module IV – Estimation and Tests of Significance

Populations and Samples:

Parameter and Statistic:
Standard error:

The Sampling Distribution of the Mean (σ known):

If a random sample of size n is taken from a population having the mean

μ and the variance σ2, then X is a random variable whose distribution has
the mean μ

For samples from infinite populations the variance of this distribution is σ2 /n

For samples from a finite population of size N the variance is (σ2 /n )( N−n/ N −1) .

Calculating a finite population correction factor:

Q. Find the value of the finite population correction factor for n=10 and N=1,000.
 Module IV – Estimation and Tests of Significance

Chebyshev’s theorem:

Law of large numbers

Let X1, X2,...,Xn be independent random variables each having the same mean μ and variance
σ[Link], for any positive ε,

As the sample size increases, unboundedly, the probability that the sample mean differs
from the population mean μ,by more than an arbitrary amount ε,con verges to zero.
 Module IV – Estimation and Tests of Significance

Central limit theorem

If is the mean of a random sample of size n taken from a population having the
mean μ and the finite variance σ2, then

is a random variable whose distribution function approaches that of the standard

normal distribu ons as n → ∞

Q. A population consists of five numbers (2, 3,6, 8, 11). Consider all possible samples of
size two which can be drawn with replacement from this population. Calculate the
standard error of the sample mean.

Q. Consider a hypothetical population composing only of three values (2, 5, 8). Draw all
possible samples of size 2 and calculate the sample mean .Examine whether the static is
unbiased for the corresponding parameter.
 Module IV – Estimation and Tests of Significance

Q. If the distribution of scores of all students in an examination has a mean of 296 and a
standard deviation of 14, what is the probability that the combined gross score of 49
randomly selected students is less than 14,250?

Q. Car mufflers are constructed by nearly automatic machines. One manufacturer finds that,
for any type of car muffler, the time for a person to set up and complete a production run has
a normal distribution with mean 1.82 hours and standard deviation 1.20. What is the
probability that the sample mean of the next 40 runs will be from 1.65 to 2.04 hours.

Point and Interval Estimation:

Q. A random sample of size n = 100 is taken from a population with σ = 5.1. Given
that the sample mean is = 21.6, construct a 95% confidence interval for the
population mean μ ( z0.025 = 1.96)
 Module IV – Estimation and Tests of Significance

Large sample confidence interval for μ when σ unknown

Q. For a sample of size on nanopillars data n = 50, = 305.58 nm, and s2 = 1,366.86 (hence,
s = 36.97 nm), construct a 99% confidence interval for the population mean of all
nanopillars. z = 2.575
0.005

Tests of hypothesis

Type of hypothesis:
Null hypothesis (H0 ) alternative hypothesis (H1)
Simple hypothesis and composite hypothesis
Level of significance
Critical region/Rejection region
Acceptance region.
Types of errors
 Module IV – Estimation and Tests of Significance

Possible Hypothesis Test Outcomes

Actual Situation

H0 True H0 False
Do Not
Reject No error Type II Error
Key: H0 (1 – ) (β)
Outcome
(Probability) Reject Type I Error No Error
H0 ( ) (1-β)

The power t is the probability of rejecting a null hypothesis that is false.

i.e., Power = P(Reject H0 | H1 is true) [Note: Power of the test increases as the sample size
increases]
 Module IV – Estimation and Tests of Significance

Q. A civil engineer wants to establish that the average time to construct a new two-storey
building is less than 6 months. Formulate null and alternative hypotheses.

Q. A manufacturer of four-speed clutches for automobiles claims that the clutch will
not fail until after 50,000 miles. Formulate null and alternative hypotheses.

Q. Several square inches of gold leaf are required in the manufacture of a high-end
component. Suppose that the population of the amount of gold leaf has σ = 8.4 square
inches. We want to test the null hypothesis μ =80.0 square inches against the alternative
hypothesis μ<80.0 square inches on the basis of a random sample of size n = 100.

a) If the null hypothesis is rejected for X < 78.0 square inches and otherwise it is accepted,
what is the probability of Type I error?
b) Find power of the test when mu=78 for the question (a).
c) Find power of the test when mu=77 for the question (a)
 Test of Hypothesis
for the Mean (σ Known)
• Convert sample result (x ) to a z value
Hypothesis
Tests for 

σ Known σ Unknown

Consider the test

H0 : μ  μ0 The decision rule is:

H1 : μ  μ0 x  μ0
Reject H0 if z   zα
σ
(Assume the population is normal) n
Prepared by [Link] Kumar.K, Assistant Professor
 Decision Rule
H0 : μ = μ 0
x  μ0
Reject H0 if z   zα H1 : μ > μ 0
σ
n

Alternate rule:
Reject H0 if X  μ0  Z ασ/ n 

Do not reject H0 Reject H0

Z 0 zα

Roll no:2184, 7112

x μ0 μ0  z α
σ
n

Prepared by [Link] Kumar.K, Assistant Professor Critical value

 Module IV – Estimation and Tests of Significance
Critical value Level of significance

Test for single mean: 1% 5% 10%

Two tailed test 2.58 1.96 1.64
Right tailed test 2.33 1.645 1.28
Left tailed test -2.33 -1.645 -1.28

Q) Suppose, for instance, we want to establish that the thermal conductivity of a certain kind
of cement brick differs from 0.340, the value claimed. Based on size n = 35 with mean
thermal conductivity 0.343. Test at the 0.05 level of significance. From information gathered
in similar studies, we can expect that the variability of such determinations is given by σ =
0.010.
Q) The manufacturer of a pizza like product measures the amount of cheese used per run.
Suppose that a consumer agency wishes to establish that the population mean is less than
71 pounds, the target amount established for this product. There are n = 80 observations
and a computer calculation gives = 68.45 and S = 9.583. What can it conclude if the
probability of a Type I error is to be at most 0.01?
 Module IV – Estimation and Tests of Significance

Test for two mean: Critical value Level of significance

1% 5% 10%
Two tailed test 2.58 1.96 1.64
Right tailed test 2.33 1.645 1.28
Left tailed test -2.33 -1.645 -1.28

When is

Confidence Intervals:

1-α = P( α ( α
 Module IV – Estimation and Tests of Significance
Critical value Level of significance
Test for two mean:
1% 5% 10%
Two tailed test 2.58 1.96 1.64
Right tailed test 2.33 1.645 1.28
Left tailed test -2.33 -1.645 -1.28

As a base line for a study on the effects of changing electrical pricing for electricity
during peak hours, July usage during peak hours was obtained for n1 =45 homes with
air-conditioning and n2 = 55 homes without. The July on-peak usage (kWh) is
summarized as
Sample
Population Size Mean Variance
With 45 204.4 13825.3
Without 55 130.0 8632

Obtain 95% confidence interval for difference of two means (

 Module IV – Estimation and Tests of Significance
Critical value Level of significance
1% 5% 10%
Two tailed test 2.58 1.96 1.64
Right tailed test 2.33 1.645 1.28
Left tailed test -2.33 -1.645 -1.28
Q. To test the claim that the resistance of electric wire can be reduced by more than
0.050 ohm by alloying, 32 values obtained for standard wire yielded = 0.136 ohm
ands1 = 0.004 ohm, and 32 values obtained for alloyed wire yielded = 0.083 ohm
and s2 = 0.005 ohm. At the 0.05 level of significance, does this support the claim?

Test for a Variance:

Q. The lapping process which is used to grind certain silicon wafers to the proper
thickness is acceptable only if σ, the population standard deviation of the thick ness
of dice cut from the wafers, is at most 0.50 mil. Use the 0.05 level of significance to
test the null hypothesis σ = 0.50 against the alternative hypothesis σ> 0.50, if the
thicknesses of 15 dice cut from such wafers have a standard deviation of 0.64 mil
 Module IV – Estimation and Tests of Significance

Test for two Variances:

Q. By Company 1 than in that done by Company 2. If independent

random samples of size 12 of the two companies’ work yield s1 =
0.035 mil and s2 = 0.062 mil, test the null hypothesis σ1 = σ2 against
the alternative hypothesis <
Q. The fire department of a city wants to test the null hypothesis that σ = 10 minutes for the
time it takes a fire truck to reach a fire site against the alternative hypothesis σ≠ 10 minutes.
What can it conclude at the 0.05 level of significance if a random sample of size n =48yields s
= 9.5 minutes?

Q. With reference to Exercise 8.6, where we had n1 = 40,n2 =30,s1 =15.2, and
s2=18.7, use the 0.05 level of significance to test the claim that there is a greater
variability in the number of cars which make left turns approaching from the south
between 4 p.m. and 6 p.m. at the second intersection. Assume the distributions are
normal.
 Test for Proportion: Critical value Level of significance
1% 5% 10%
Two tailed test 2.58 1.96 1.64
Right tailed test 2.33 1.645 1.28
Left tailed test -2.33 -1.645 -1.28

p=X/n

Q. Transceivers provide wireless communication among electronic components of

consumer products. Responding to a need for a fast, low-cost test of Bluetooth-capable
transceivers, engineers2 developed a product test at the wafer level. In one set of trials with
60 devices selected from different wafer lots, 48 devices passed. Test the null hypothesis p =
0.70 against the alternative hypothesis p > 0.70 at the 0.05 level of significance.
Point estimate of a binomial proportion p:
An engineering firm responsible for maintaining and improving the performance of
thousands of wind turbines is asked to check on the sound levels. The purpose is to
determine the proportion that currently would not meet proposed new sound level
restrictions. A random selection of n = 55 wind turbines reveals that 8 operate too loudly
according to the proposed new restrictions. Obtain a point estimate of the proportion of their
wind turbines that do not meet specifications
2.583218

Small Sample tests:

Test for a Mean

t
/ /

Q. Scientists need to be able to detect small amounts of contaminants in the environment.

As a check on current capabilities, measurements of lead content( μ g / L) are taken from
twelve water specimens spiked with a known concentration.
2.4 2.9 2.7 2.6 2.9 2.0 2.8 2.2 2.4 2.4 2.0 2.5
Test the null hypothesis μ = 2.25 against the alternative hypothesis μ>2.25 at the 0.025 level
of significance.

Q. Suppose n = 9 measurements were made on a key performance indicator.

123 106 114 128 113 109 120 102 111
Conduct a test of hypotheses with the intent of showing that the mean key performance
indicator is different from 107. Take α = 0.05 and assume a normal population.
 Small Sample tests:
Test for two Means:
( ) ( )
t

Q. To reduce the amount of recycled construction materials entering landfills it is crushed

for use in the base of roadways. Green engineering practices require that their strength,
resiliency modulus (MPa), be accessed. Measurements on n1 = n2 = 6 specimens of
recycled materials from two different locations produce the data
Location 1 : 707 632 604 652 669 674
Location 2 : 552 554 484 630 648 610
Use the 0.05 level of significance to establish a difference in mean strength for materials
from the two locations

Q. The dynamic modulus of concrete is obtained for two different concrete mixes. For the
first mix, n1=33, x=115.1, and s1=0.47 psi. For the second mix, n2 = 31, y = 114.6 , and
s2=0.38. Test, withα=0.05, the null hypothesis of equality of mean dynamic mod ulus versus
the two-sided alternative.
 Q. The following are the number of hydraulic pumps which a sample of 10 industrial
machines of Type A and a sample of 8 industrial machines of Type B manufactured over a
certain fixed period of time:
Type A: 8 6 7 9 4 11 8 10 6 9
Type B: 4 3 6 7 7 1 9 6
Assuming that the populations sampled can be approximated closely with normal
distributions having the same variance, test the null hypothesis μ1−μ2= 0 against the
alternative hypothesis μ1−μ2 ≠0 at the 0.05 level of significance.

Small Sample tests:

Paired t test:
t
/

Q. The following are the average weekly losses of worker-hours due to accidents in 10
industrial plants before and after a certain safety program was put into operation:
Before: 45 73 46 124 33 57 83 34 26 17
After: 36 60 44 119 35 51 77 29 24 11
Use the 0.05 level of significance to test whether the safety program is effective.