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13th Edition

Anderson

Publisher: CENGAGE L

ISBN: 9781305881884

Chapter 9.2, Problem 7E

Textbook Problem

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Carpetland salespersons average $8000 per week in sales. Steve Contois, the firm’s vice president, proposes a compensation plan with new selling incentives. Steve hopes that the results of a trial selling period will enable him to conclude that the compensation plan increases the average sales per salesperson.

- a. Develop the appropriate null and alternative hypotheses.
- b. What is the Type I error in this situation? What are the consequences of making this error?
- c. What is the Type II error in this situation? What are the consequences of making this error?

**a.**

To determine

Identify the null and alternative hypotheses.

Here, the compensation plan increases the average sales per salesperson. This can be written as

**b.**

To determine

Identify the Type I error in the given situation and identify the consequences of making this error.

**c.**

To determine

Identify the Type II error in the given situation and identify the consequences of making this error.

STATISTICS F/BUSINESS+ECONOMICS-TEXT

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