## Question 689:

1

1.  For the first part we need to see that the null hypothesis is the inventory is equal to or less than for FIFO. That makes the  best choice C.
2. Once we picked the NULL hypothesis for Q1, we pick the opposite for the alternative. We are testing specifically whether LIFO is better at reducing inventory, so we want the mean of LIFO (μL) to be lower. The best answer is D.

3. Since we are told that the manufacturer tested five products using both methods we have the same products in both groups (LIFO and FIFO) and that makes this a paired t-test. We can analyze the data by subtracted either LIFO-FIFO or FIFO-LIFO to test whether the difference is greater than what we’d expect to see from chance alone. The best choice is A, since the degrees of freedom in a paired t are n-1 =5-1 =4.

4. We’d look up the value in a t-table using 1 sided area and 4 degrees of freedom or the excel function = TINV(.10,4)-- use .10 because using .05 provides the 2-sided area. We get 2.132, making A the best choice. It is ± depending on which value we subtract 1st.

5. NOTE: Questions #5 and #6 require a mean and standard deviation which havent been provided, so there appears to be missing information in this question. Whatever we pick in #5 affects the answer in #6. All I can do is guess what the difference is based on the choices. 2 of the 4 choices fail to reject the null, so I picked one of them and then used that for #6. It’s a complete toss up here, I’ll pick C (again see if you can find a mean and standard deviation somewhere).

6. For 6 (see note above) I then picked D because it goes with #5, but again this is a guess since information is missing.
7. The answer is C, as we discussed above--we're using a paired t test.