Practical Decision Making Essay Example | Topics and Well Written Essays - 1000 words

Practical Decision Making - Essay Example In HTAB there are three kinds of Hypothesis - Research Hypothesis, Statistical Hypothesis and Substantive Hypothesis. Research Hypothesis is a statement of what the researcher believes will be the outcome of an experiment or a study. Statistical Hypothesis is a more formal structure derived from the research hypothesis. Substantive Hypothesis is a statistically significant difference which does not imply a material substantive difference. (Business Statistics 4e by Ken Black). A preconceived conclusion is an inevitable outcome of Research Hypothesis. The researcher tends to become biased. For example, older workers are more loyal to a company. That may true in most cases. But it is still a hypothesis. There maybe some old workers who resent company policy to the extent that they have been nursing grievances or have not been allowing new employees to prove their potential in the company. Statistical hypothesis is to some extent also preconceived . Although it has a more formal structure it is essentially based on the preconceived notion of the Research Hypothesis. Substantive Hypothesis is the significant difference which does not always encompass material or quantitative difference. There are two parts of Statistical hypothesis - a null hypothesis ... There maybe some old workers who resent company policy to the extent that they have been nursing grievances or have not been allowing new employees to prove their potential in the company. Statistical hypothesis is to some extent also preconceived . Although it has a more formal structure it is essentially based on the preconceived notion of the Research Hypothesis. Substantive Hypothesis is the significant difference which does not always encompass material or quantitative difference. There are two parts of Statistical hypothesis - a null hypothesis and an alternative hypothesis. According to Null Hypothesis one might be tempted to conclude that nothing new is happening. However, according to the Alternative Hypothesis one would emphatically conclude something new is happening. The Null and Alternative Hypotheses are mutually exclusive. Only one of them can be true. They are also collectively exhaustive. They are stated to include all possibilities. While Null Hypothesis is assumed to be true, the onus of proof falls on the Alternative Hypothesis. Failing to reject a false null hypothesis and rejecting a true null hypothesis are the two types of errors which occur in HTAB system. Once the Hypothesis is made it is tested. Based on the test result statistical action is taken. Then the Business Implications are determined. The first step in Testing Hypotheses is to establish the hypothesis and state the null and alternative hypotheses. Then the appropriate statistical test and sampling distribution is determined. After specifying Type I error rate the decision rule is stated. Sample Data is gathered and the value of the test statistic is calculated. Once the statistical conclusion is stated and the business implications are determined a managerial