Question: 8. Suppose a new production method will be implemented if a hypothesis test supports the conclusion that the new method reduces the mean operating cost

8. Suppose a new production method will be implemented if a hypothesis test supports the

conclusion that the new method reduces the mean operating cost per hour.

a. State the appropriate null and alternative hypotheses if the mean cost for the current

production method is $220 per hour.

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?

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