Management wants to determine whether production will be inc

Management wants to determine whether production will be increased by instituting a bonus plan. A mean production rate of 50 units per day and a standard deviation of 8 units per day had been established before the proposed bonus plan. A sample test was agreed upon in which a random sample of workers would be given a bonus plan to test

the null hypothesis H0: less than or equal to 50 versus the alternative hypothesis H1: greater than with an = .03

We also want = .02 at a production level of 54 units per day. What sample size is required to achieve this? Also, specify the decision ruke to be followed in terms of the sample mean production rate.

Solution