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For this practical application assignment, you will assume the role of two different managers to recommend a course of action by applying hypothesis testing to business decisions. For the first scenario, you work for a regionally based magazine publisher, and for the second, you have just been hired away from your buyer's position at Macy's to work for the local mall.

You will need to use the Hypothesis Tester Single Sample document to complete both of the scenarios. You may also want to review the SAS One Sample T-Test tutorial, also located in the Resources.

Practical Application Scenario 1

In 2010, Playbill Magazine contacted Boos Allen to determine the mean annual household income of its readers. Using a list of customers provided by Playbill, Boos Allen randomly sampled 300 Playbill customers. From that sample, Boos Allen is confident that the population average Playbill reader's household income is $119,155 and has a population sample household income standard deviation of $30,000.

Recently, two Playbill executives suggested that Playbill's reader mean average household income has increased and that the magazine's price should be raised. As Playbill's new marketing manager, you convince Playbill's chief operating officer to complete a second survey with Boos Allen to confirm that assertion. Yesterday, the new Boos Allen report appeared on your desk. From another sample of Playbill customers taken from a recent list you sent Boos Allen, the 2012 Playbill customer's profile is a mean annual household income of $124,450 with a population standard deviation of household income unchanged at $30,000.

You realize that even though you do not have the Playbill reader population standard deviation, you do have enough data to perform a one sample hypothesis test. In order to choose the correct statistical tool to complete this assignment, consider the following questions:

What do you know about the population being studied (for example, do you know the standard deviation of that entire population)?

What do you know about the sample of the population you took (for example, which sample statistical parameters do you havemean, standard deviation, variance, and so on)?

Complete the following for this assignment:

Determine the null hypothesis, via both an explanation and a math equation.

Determine the alternative hypothesis, via both an explanation and a math equation.

Determine whether to accept or reject the null hypothesis. You may solve the equation manually, use the Hypothesis Tester Single Sample file provided in Resources, or use the SAS Enterprise Guide. You may also use the Hypothesis Tester multimedia piece provided in Resources to review the process for this equation.

Determine if the p-value indicates acceptance or rejection of the null. Use alpha = .05

Report the rejection or acceptance of the null in terms of the scenario results. For this scenario, write a three-sentence paragraph that details why you can be statistically confident that the mean household Playbill reader's income has increased, decreased, or remained the same, and what would happen if alpha was .01.

Inputs:
Hypothesized population proportion:	0.35	<-- Input the appropriate number for your situation
Sample Proportion (p-bar)	0.4	<-- Input the appropriate number for your situation
Sample Size (n)	30	<-- Input the appropriate number for your situation
Intermediate Calculations:
Standard Error of the Estimate:	0.0871
Test statistic (z):	0.574169252
Results:		For the Alpha level given, H0 should be:
		Alpha:	0.01	0.05	0.1
One tailed, H0: P => 0.35, p =	0.7171		not rejected	not rejected	not rejected
One tailed, H0: P <= 0.35, p =	0.2829		not rejected	not rejected	not rejected
Two-tailed, H0: P = 0.35, p =	0.5659		not rejected	not rejected	not rejected