The Supervisor of an Automobile Sales and Service Industry Would

Essay

The supervisor of an automobile sales and service industry would like the variance of the number of automobiles serviced not to exceed five units-squared. He would recruit one more service executive if the variance exceeds this threshold. In a recent random sample of 14 services, he computed the sample standard deviation as 3.3. He believes that the automobile services are normally distributed.
A) State the null and the alternative hypotheses to test if the threshold has been crossed.
B) Use the critical value approach to conduct the test at α = 0.01.
C) What should the supervisor do?