Hi there,
I'm having real trouble with my statistics module and just cannot get my head around hypothesis testing at the moment. Here is the problem I'm working on:
A timber merchant has two machines producing mouldings: 60% by Machine 1 and 40% by Machine 2. The proportion of substandard mouldings produced by the machines are 2% and 12% respectively. A moulding was produced, but the merchant has forgotten to label which machine it has come from. When it were tested, it was found to be substandard. The merchant is interested in which machine the moulding had come from.
I'm asked to use ideal hypothesis testing to analyse the data and draw conclusions.
My thinking:
Null hypothesis (Ho) is that the sub-standard moulding came from machine 2
Alternative hypothesis (H1) is that the moulding came from machine 1.
To do this problem I need P(Ho), P(H1), P(Data|Ho) and P(Data|H1).
At this point I'm so confused as to how to find these 4 probabilities and whether my null and alternative hypotheses are even correct. I'm severely second guessing myself and this is limiting my progress.
I would love some help and advice if there's anyone who can lend a helping hand.
Thinking out loud, I feel the P(Ho) is 0.6*0.02=0.012 (the number of sub-standard mouldings from total production) and P(H1) is 0.4*0.12=0.048. But then have I used the data in the question and these probabilities are actually something else like P(Data|H1), etc.