Refer to Problem 10.5. Suppose the manufacturer would be particularly concerned if the average set-up time per hour were 12.0min or more. The standard deviation is estimated at about σ = 3:0min, and a...

Refer to Problem 10.5. Suppose the manufacturer would be particularly concerned if the average set-up time per hour were 12.0min or more. The standard deviation is estimated at about σ = 3:0min, and a variable such as setup time is assumed to be normally distributed. Because of the long-run cost implications of this decision, the manufacturer designates that the probability of both Type I error and Type II error should be held to 0.01. How many randomly selected hours of equipment operation should be sampled, as a minimum, to satisfy the testing objectives?

Problem 10.5

A manufacturer contemplating the purchase of new tool making equipment has specified that, on average, the equipment should not require more than 10min of setup time per hour of operation. The purchasing agent visits a company where the equipment being considered is installed; from records there the agent notes that 40 randomly selected hours of operation included a total of 7hr and 30min of setup time, and the standard deviation of setup time per hour was 3.0 min.