Every month a clothing store conducts an inventory and calculates the losses due to theft. The store would like to reduce these losses and is considering two methods to do so: the first is to hire a security guard and the second is to install cameras. The manager of the store has conducted the experiment: During the first 6 months he hired a security guard (method 1) and during the next 6 months he installed cameras (method 2). The monthly losses were reported as follows: Security guard 350 289 407 398 470 259 Cameras 488 301 276 380 421 425 a)Estimate, with 95% confidence level, the expected monthly loss when hiring a security guard. b)Since the cameras are cheaper than the guard, the manager would prefer to install the cameras unless there was enough evidence to infer that the guard was better. Conduct a hypothesis testing to advise what the manager should do? (Assuming equal variances and using α = 0.05)
Every month a clothing store conducts an inventory and calculates the losses due to theft. The store would like to reduce these losses and is considering two methods to do so: the first is to hire a security guard and the second is to install cameras. The manager of the store has conducted the experiment: During the first 6 months he hired a security guard (method 1) and during the next 6 months he installed cameras (method 2). The monthly losses were reported as follows:
|
Security guard |
350 289 407 398 470 259 |
|
Cameras |
488 301 276 380 421 425 |
a)Estimate, with 95% confidence level, the expected monthly loss when hiring a security guard.
b)Since the cameras are cheaper than the guard, the manager would prefer to install the cameras unless there was enough evidence to infer that the guard was better. Conduct a hypothesis testing to advise what the manager should do? (Assuming equal variances and using α = 0.05)
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