Question 1     

Part (a)           

Open the “Bus Maintenance.xls” file that is posted with the Assignment. In order to test whether there is a difference in the variance of maintenance costs between buses with Diesel engines and those with gasoline engines, use Excel to carry out an “F-Test: Two-Sample for Variances” with α = 0.05. You must submit your actual Excel file with the output as part of the assignment.


Part (b)             Based on the F-test, what is your decision (“reject” or “do not reject”) regarding the null hypothesis that the two population variances are equal to each other? Indicate on which part of the Excel output you base your decision.

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Expert Answers

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(a) I do not have a current copy of Excel. Here are the instructions to get the results from the F-Test:

(1) Enter the data into columns A and B
(2) From the toolbar select Data -> Data Analysis
(3) Analysis Tools -> F-Test
(4) Input the ranges for A and B
(5) Input the confidence level: Here since we are looking for a difference (not that one is greater/less than the other) we must use `alpha/2=.025 `
(6) Select where you want the output to be sent.

You should get the following information:

`S_(x1)=71.8375172 `
`S_(x2)=51.5592394 `
` bar(x_1)=448.7179487 `
`bar(x_2)=451.7 `

(b)Do not reject the null hypothesis. p>.05.

If p<alpha we reject the null hypothesis as the random sample should not occur by chance if the variances are actually equal.

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