2. Use this information for questions 6 and 7. A company has made a major change

Question

2. Use this information for questions 6 and 7. A company has made a major change in its advertising strategy and is now interested in determining if the change has resulted in a significant increase in sales on a per store basis. That is, they want to determine if this year's sales (#1) have increased compared to last year's sales (#2) on a per store basis.

(1) The correct null and alternative hypothesis for this situation would be:

Ho: d>0, H1: d0 H0: d0, H1: d>0 Ho: d 0, H1: d<0 H0: d = 0, H1: d0

(2) If the decision for this test is to not reject the null hypothesis, what is the appropriate managerial decision?

The change is advertising did increase sales significantly.

Sales increased and then decreased from last year to this year.

There is no evidence that the change in advertising increased sales from last year to this year

Sales have decreased from last year to this year.

There is not enough information do draw a managerial conclusion.

Explanation / Answer

(1)Here , d=Difference between this year sale & last year's sale

The correct null and alternative hypothesis for given situation would be:

H0: d0, H1: d>0 i.e. this year's sales (#1) have increased compared to last year's sales (#2) on a per store basis.

(2) If the decision for this test is to not reject the null hypothesis i.e. to accept the null hypothesis then the appropriate managerial decision is there is no evidence that the change in advertising increased sales from last year to this year.

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