A supermarket manager claims that the standard deviation for

A supermarket manager claims that the standard deviation for errors when a scanner is used is less then 200. At the 0.01 level test the claim if a sample of 20 tickets found a standard deviation of 189. Select the null and alternate hypotheses.

Solution

Ho: o=200

Ha: o<200

The test statisitc is

Chisquare= (n-1)*s^2/o^2

=19*189^2/200^2

=16.97

Given a=0.01, the critical value is chisquare with 0.01, df=n-1=19 is 7.63 (from chisquare table)

Since 16.97 is larger than 7.63, we do not reject Ho.