An oil company sends out monthly statements to its customers who purchased gasoline and other items using the company’s credit card. Until now, the company has not included a pre-addressed envelope for returning payments. The mean number of days before payment is received is 9.8. As an experiment to determine whether enclosing pre-addressed envelopes speeds up payment, 150 customers selected at random were sent pre-addressed envelopes with their bills. The sample statistics showed a mean of 9.16 days and a standard deviation of 2.642 days. Do the data provide sufficient evidence at 5% level of significance to establish that enclosure of pre-addressed envelopes improves the average speed of payments?
Definition Definition Measure of central tendency that is the average of a given data set. The mean value is evaluated as the quotient of the sum of all observations by the sample size. The mean, in contrast to a median, is affected by extreme values. Very large or very small values can distract the mean from the center of the data. Arithmetic mean: The most common type of mean is the arithmetic mean. It is evaluated using the formula: μ = 1 N ∑ i = 1 N x i Other types of means are the geometric mean, logarithmic mean, and harmonic mean. Geometric mean: The nth root of the product of n observations from a data set is defined as the geometric mean of the set: G = x 1 x 2 ... x n n Logarithmic mean: The difference of the natural logarithms of the two numbers, divided by the difference between the numbers is the logarithmic mean of the two numbers. The logarithmic mean is used particularly in heat transfer and mass transfer. ln x 2 − ln x 1 x 2 − x 1 Harmonic mean: The inverse of the arithmetic mean of the inverses of all the numbers in a data set is the harmonic mean of the data. 1 1 x 1 + 1 x 2 + ...
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