In May 2008 CNN reported that sports utility vehicles (SUVs) are plunging toward the “endangered” list. Due to soaring oil prices and environmental concerns, consumers are replacing gas-guzzling vehicles with fuel-efficient smaller cars. As a result, there has been a big drop in the demand for new as well as used SUVs. A sales manager of a used car dealership for SUVs believes that it takes more than 90 days, on average, to sell an SUV. In order to test his claim, he samples 40 recently sold SUVs and finds that it took an average of 95 days to sell an SUV. He believes that the population standard deviation is fairly stable at 20 days.

a. State the null and the alternative hypotheses for the test.

b. What is the p-value?

c. Is the sales manager’s claim justifiable at α = 0.01?

d. Repeat the above hypothesis test with the critical value approach.