The following exercise require the use of a computer and software. The answers may be calculated manually. See Appendix A for the sample statistics.

The feasibility of constructing a profitable electricity producing windmill depends on the mean velocity of the wind. For a certain type of windmill, the mean would have to exceed 20 miles per hour to warrant its construction. The determination of a site’s feasibility is a two-stage process. In the first stage, readings of the wind velocity are taken and the mean is calculated. The test is designed to answer the question, “Is the site feasible?” In other words, is there sufficient evidence to conclude that the mean wind velocity exceeds 20 mph? If there is enough evidence, further testing is conducted. If there is not enough evidence, the site is removed from consideration. Discuss the consequences and potential costs of Type I and Type II errors