Hi there!

A. Determine if this is a one-tailed or two-tailed test. Justify your decision.
It is a one tailed test, because the company's claim is that the mean is at least 12.0 ounces.


B. State the null hypothesis and alternative hypothesis. Your null hypothesis should assume the company's claim is correct.
Null = company's claim: mean = 12.0 ounces
Alternative: mean < 12.0 ounces


C. Define the term Type I error and explain what a Type I error is in terms of this problem.
In a type 1 error, you reject the null hypothesis when it is actually correct. http://en.wikipedia.org/wiki/False_positive#Type_I_error . In the context of this problem, it would mean that the person will send a complaint, even though they shouldn't have, because the bags are actually full.


D. Define the term level of significance and identify the level of significance for this problem.
The level of significance is the chance that we will get a type 1 error. http://en.wikipedia.org/wiki/Statistical_significance In the chips problem, it is equal to 1.00 - 0.95 = 0.05


E. Calculate the test statistic as a z-score. Show all relevant work.
Using the formula for z:

z = (xbar-mu)/(sigma/sqrt(n)) -- where xbar is the sample mean, mu is the mean, sigma is the standard deviation, and n is the number of bags in the sample:

z = (11.9-12.0)/(0.4/sqrt(30)) = -1.3693

F. Using a standard table, you determine that the critical value is -1.645. Determine if you are able to reject the null hypothesis and explain how you reached this conclusion. (Your conclusion should include a comment relating the results to the original problem.)

The z value is -1.6449. This value is less than -1.3693, so we "fail to reject" the null hypothesis. This means that the customer should not complain, because there is not enough evidence that the bags were understocked.

Let me know if you have any questions,

Scott