Hypothesis Testing for Online Retail Store Profitability

Question 1
(a) Hypothesis testing
Whether the online retail store will be termed as profitable when the mean order is more than
$85. It is apparent that population standard deviation is unknown and thus, t test would be
used in place of z test.
Here, it is apparent that p value (0.013) is lesser than level of significance i.e. 0.05 and thus,
null hypothesis will be rejected and alternative hypothesis will be accepted. Therefore, the
online retail store will be termed as profitable when the mean order is more than $85.
(b) Hypothesis testing
The proportion of people who has got an e-gift card are higher than 20%.
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Here, it is apparent that p value (0.1807) is more than level of significance i.e. 0.05 and thus,
null hypothesis will not be rejected and alternative hypothesis will not be accepted.
Therefore, the proportion of people who has got an e-gift card are not higher than 20%.
(c) Hypothesis testing
Whether the two appraisers mean are statistically different or not.
Null hypothesis Ho : μApp raiser 1 − μAppraiser 2 = 0
Alternative hypothesis Ha : μAppraiser 1 − μAppraiser 2 ≠ 0
It is apparent that population standard deviation is unknown and therefore, the appropriate
test would be t test. Further, the two samples mean are independent and thus, two sample
independent t test would be used.
Two tailed hypothesis p value = 0.7414
Here, it is apparent that p value (0.7414) is more than level of significance i.e. 0.05 and thus,
null hypothesis will not be rejected and alternative hypothesis will not be accepted.
Therefore, the two appraisers mean are not statistically different.
Question 2
(a) Multiple regression analysis
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Regression equation
Longevity = 3.244 + ሺ0.451 ∗ Motherሻ+ ሺ0.411 ∗ Fatherሻ+ ሺ0.017 ∗ Gmothersሻ
+ (0.087 ∗ Gfathers)
(b) Slope coefficients
Mother: This implies that when the age of mother has increased by 1 year then the
corresponding age of the person would increase by 0.451 years.
Father: This implies that when the age of father has increased by 1 year then the
corresponding age of the person would increase by 0.411 years.
Gmother: This implies that when the age of grandmother has increased by 1 year then the
corresponding age of the person would increase by 0.017 years.
Gfather: This implies that when the age of grandfather has increased by 1 year then the
corresponding age of the person would increase by 0.087.
Hypothesis testing
Ho : Slope is insignificant.
HaSlope is significant.
Null hypothesis will be rejected when the p value of the slope coefficient is lower than
significance level (0.05).
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