Guide to Using Excel For Basic Statistical Applications To Accompany Business Statistics: A Decision Making Approach, 6th Ed. Chapter 8: Introduction to Hypothesis Testing By Groebner, Shannon, Fry, & Smith Prentice-Hall Publishing Company Copyright, 2005

Chapter 8 Excel Examples  Hypothesis Test - Hypothesis Test - Franklin Tire Company

Hypothesis Test Franklin Tire Company Issue: The company wants to make the claim in advertisements that their new tire will average more than 60,000 miles. Objective: Use Excel to test whether the population mean tire mileage exceeds 60,000 miles. Data file is Franklin.xls

Open File Frankin.xls File contains sample data for 100 tires – last row is 101 Hypothesis Test – Franklin Tire

Click on PHStat – then select Box and Whisker Plot Hypothesis Test – Franklin Tire

Define data range, select Five Number Summary. Hypothesis Test – Franklin Tire

You need to combine output sheets from PHStat. Hypothesis Test – Franklin Tire

To Continue: Click on PHStat – then select One Sample Tests – the select t-Test for the Mean, sigma unknown Hypothesis Test – Franklin Tire

Enter the required values Hypothesis Test – Franklin Tire

PHStat output – Since p- value > alpha =.05, don’t reject the null hypothesis – thus the company should not make the claim about the tires lasting over 60,000 miles on average. Hypothesis Test – Franklin Tire

The Franklin hypothesis test can be done using Excel without using PHStat. Begin by opening the file: Franklin.xls Hypothesis Test – Franklin Tire

Click on Tools – Data Analysis – Descriptive Statistics Hypothesis Test – Franklin Tire

Enter data range and output location. Check Summary Statistics Hypothesis Test – Franklin Tire

Use Descriptive output to compute the t statistic. t =.3616 Hypothesis Test – Franklin Tire

Determine critical t for alpha =.05. Click on Function Wizard. Select Statistical category. Select TINV Hypothesis Test – Franklin Tire

Enter alpha level and degrees of freedom. critical t =1.984 Hypothesis Test – Franklin Tire

Since t = ,000 miles Hypothesis Test – Franklin Tire