Question

The manager of an automobile dealership is considering a new bonus plan designed to increase sales volume. Currently, the mean sales volume is 24 automobiles per month. The manager wants to conduct a research study to see whether the new bonus plan increases sales volume. To collect data on the plan, a sample of sales personnel will be allowed to sell under the new bonus plan for a one-month period.

a. Which form of the null and alternative hypotheses most appropriate for this situation.
b. Comment on the conclusion when H0 cannot be rejected.
c. Comment on the conclusion when H0 can be rejected.

Answer 1

A) H_o ; μ ≤ 24

H_o ; μ > 24

B) There is no sufficient evidence to support the claim that the new bonus plan increases sales volume.

C) There is sufficient evidence to support the claim that the new bonus plan increases sales volume.

Explanation:

A) In the question, the claim is to test whether the new bonus plan increases sales volume.

The claim is either the null hypothesis or the alternative hypothesis. The null and alternative hypothesis state the opposite of each other. Thus, the hypothesis for this problem is;

H_o ; μ ≤ 24

H_o ; μ > 24

B) If H_o cannot be rejected, then we can conclude that; there is no sufficient evidence to support the claim that the new bonus plan increases sales volume.

C) If H_o can be rejected, then we can conclude that; there is sufficient evidence to support the claim that the new bonus plan increases sales volume.