What is Hypothesis Testing?

 In hypothesis testing, relatively small samples are

used to answer questions about population
parameters (inferential statistics)
 There is always a chance that the selected sample
is not representative of the population; therefore,
there is always a chance that the conclusion
obtained is wrong
 With some assumptions, inferential statistics
allows the estimation of the probability of getting
an “odd” sample and quantifies the probability (p-
value) of a wrong conclusion
 Hypothesis Testing–Introduction

- Refers to the use of statistical analysis to determine if

observed differences between two or more data samples
are due to random chance or to be true differences in the
samples
- Increase your confidence that probable X’s are
statistically significant
- Used when you need to be confident that a statistical
difference exists
 Hypothesis Testing For Equal Means
 The histograms below show the height of inhabitants of
countries A and B.
 Both samples are of size 100, the scale is the same, and
the unit of measurement is inches.
 Question: Is the population of country B, on average,
taller than that of country A?

Country A

Country B
60.0 62.0 64.0 66.0 68.0 70.0 72.0 74.0 76.0 78.0 80.0
[inch]
 Concepts Of Hypothesis Testing
1. All processes have 2. Samples from one
variation. given process may vary.

3. How can we differentiate

between sample–based
“chance” variation and
a true process
difference?
 Kinds Of Differences

Continuous data:
- Differences in averages
- Differences in variation
- Differences in distribution
“shape” of values
Discrete data:
- Differences in proportions
 Hypothesis Testing
Guilty vs. Innocent Example
The American justice system can be used to illustrate the
concept of hypothesis testing.

In America, we assume innocence until proven guilty.

This corresponds to the null hypothesis.

It requires strong evidence “beyond a reasonable doubt”
to convict the defendant. This corresponds to rejecting the
null hypothesis and accepting the alternate hypothesis.

Ho: person is innocent

Ha: person is guilty
 Nature Of Hypothesis
Null Hypothesis (Ho):
Usually describes a
status quo
The one you assume
unless otherwise
Shown Alternative Hypothesis (Ha):
 Usually describes a
The one you reject or
difference
fail to reject based  Signs used in Minitab:
upon evidence  or < or >
Signs used in Minitab:
= or > or <
 Activity–Hypothesis Statements (10 minutes)

Write the null and alternate hypothesis testing statements for each scenario below:

Scenario 1: You have collected delivery time of supplier A and supplier B. You wish to test whether or not
there is a difference in delivery time from supplier A and B.

Null hypothesis statement :

Alternate hypothesis statement:

Scenario 2: You suspect that there is a difference in cycle time to process purchase orders in site 1 of
your company compared to site 2. You are going to perform a hypothesis test to verify your hypothesis.

Null hypothesis statement :

Alternate hypothesis statement:

Scenario 3: You have implemented process improvements to reduce the cycle time to process purchase
orders in your company. You have collected cycle time before the process improvements and after the
process improvement was implemented. You are going to perform a hypothesis test to verify that the
process improvements have resulted in a reduction in cycle time.

Null hypothesis statement :

Alternate hypothesis statement:

 Hypothesis Testing

Guilty vs. Innocent Example

The only four possible outcomes:
1. An innocent person is set free. Correct decision

2. An innocent person is jailed. Type I error = α

The probability of this type of error occurring we represent as

3. A guilty person is set free. Type II error = β

The probability of this type of error occurring we represent as

4. A guilty person is jailed. Correct decision

 Hypothesis Testing–Another View

Ho: Person is innocent. Truth

Ha: Person is guilty.
Ho Ha
Innocent Guilty

Incorrectly
Ho Innocent, Guilty,
ACCEPT
Set Free Set Free Ho
Set Free Type II
β
Verdict
Incorrectly
REJECT Innocent, Guilty,
Ha Ho Jailed Jailed
Jailed Type I
α
 Hypothesis Testing

 The P-value is calculated by Minitab

- The probability of getting the observed difference or
greater when the Ho is true. If p > 0.05, then there is no
statistical evidence of a difference existing.
- Ranges from 0.0 - 1.0
- The alpha (α) level is usually set at 0.05. Alpha is the
probability of making a Type I Error (concluding there is a
statistical difference between samples when there really is
no difference).

P > a : Accept Ho
P  a: Reject Ho
 Statistical Tests In Minitab
Some basic statistical tests are shown below with the command for running each test
in Minitab.
What The Tool Tests Statistical Test Graphical Test
Histogram
Mean of population data 1-Sample t-test
is different from an Stat > Basic Statistics
established target. > 1-Sample t

Histogram
Mean of population 1 is 2-Sample t-test
different from mean of Stat > Basic Statistics
population 2. > 2-Sample t

The means of two or 1-Way ANOVA Histogram

more populations is Stat > ANOVA > One-Way

different.

Variance among two or

Homogeneity of Box
more populations is
Variance Plots
different. Stat > ANOVA >
Homogeneity of Variance

Output (Y) changes as Linear

the input (X) changes. Regression Scatter
Stat > Regression >Fitted Plots
Line Plot

Frequency
Output counts from two Chi-Square Test Pareto
two or more subgroups of Independence
Stat > Tables >
differ. Cross Tabulation OR C ABD E MNO
Chi-Square Test Category

Data is normally
Normality Test
distributed Stat > Basic
Statistics
 Select A Statistical Test

 Hypothesis tests to find relationships between project Y

and potential X’s
Y
Continuous Discrete

Continuous Simple Linear Logistic

Regression Regression
X
2 Sample t-Test
Discrete (Compare Means of two
samples) Chi-Square Test
ANOVA (Compare means of
multiple samples)
Homgeneity of Variance
(Compare variances)
 Hypothesis Test Summary
Normal Data
Variance Tests (Continuous Y)
Non-Normal Data
F-test- Compares two sample variances. Variance Tests (Continuous Y)
Homogeneity of Variance –Compares two or Homogeneity of Variance–Compares two or
more sample variances (use Levene’s Test) more sample variances (use Levene’s Test)
Mean Tests (Continuous Y) Median Tests (Continuous Y)
T-test One-sample–Tests if sample mean is Mood’s Median Test–Another test for two or
equal to a known mean or target.
more medians. More robust to outliers in
T-test Two-sample–Tests if two sample data.
means are equal.
Correlation–Tests linear relationship between
ANOVA One-Way–Tests if two or more
sample means are equal. two variables.
ANOVA Two-Way–Tests if means from Proportion Tests (Discrete Y)
samples classified by two categories are P-Test–Tests if two population proportions
equal.
are equal.
Correlation–Tests linear relation- ship
between two variables. Chi-Square Test–Tests if three or more
relative counts are equal.
Regression–Defines the linear relationship
between a dependent and independent
variable.
(Here, “Normality” applies to the
residuals of the regression.)
Studying and Analyzing Variation
 Choosing The Correct Hypothesis Test

YES Are Y’s NO *CHI

Are X’s Continuous?
Discrete? SQUARE (X2)

YES
NO

Yes Is Y Is the data NO *HOV (test spread)

normal?
*Linear Continuous? *Mood’s Median (test center)
Regression
YES
NO

Logistic
Comparing 2 NO *HOV (test spread)
Regression or fewer
Groups? Multiple *ANOVA (test center)
Groups
YES
* Instructions for these
tests are on the Are we
following pages Can I Match NO comparing NO
X’s With X’s? the mean to a *HOV (spread)
Standard? *2 Sample t–Test
Pre and Post YES YES
(center)
Improvement (Note: Do HOV first and use
Paired t (center) 1 Sample t results to refine 2 Sample t)
 Choosing the Appropriate Test
There are four items that we need to consider before we select the
right statistical test:
1. Is the Y Continuous or Discrete
2. Is (are) the X(s) Continuous or Discrete
3. Are we trying to compare the Variation or
Centering
4. Is Y Normal or non-Normal

Note: Not all four questions are used for the selection of
the proper test...
 Statistical Test Flow Chart
Is Y Continuous or Discrete?

Continuou
Discrete
s

Is X Continuous or Discrete? Is X Continuous or Discrete?

Continuou Continuou
Discrete Discrete
s s

Variation or Centering?
Regression Logistic
Chi-Square Regression
Variation Centering

Normal or Non-Normal Data

Correlation
Normal or Non-Normal Data Binomial
Non-
Normal
Normal
Normal Non-Normal

Homogeneity Homogeneity
of Variance of Variance
Bartlett's Levene's
Comparing Mood's
1 Sample
Relative to a Yes Median
Target?
t-Test Note:
Homogeneity
of Variance Even though the tests
F-test No
Mann Whitney are broken down by
Comparing whether the dependent
2 Sample
only Two Yes
Groups?
t-Test
Non-
variable (Y) is normal or
Parametric
Tests
not, you may still
No perform the test as long
as you know the
ANOVA
limitations of the test
 Which Hypothesis Testing Tool Would You Use?

For each scenario described below, which hypothesis testing tool would
you use? Assume normal distribution, where appropriate
1. A six-sigma project is being conducted in the field to improve the cycle time for warranty
repair returns. The warranty return cycle time was measured for a period of 6 weeks for 4
regions. The Green Belt suspects that there is a difference in average warranty repair cycle
time among each of the regions. How would you test whether there is a statistically
significant difference in mean cycle time for the different regions?
2. Tungsten steel erosion shields are fitted to the low pressure blading in steam turbines.
The most important feature of a shield is its resistance to wear. Resistance to wear can be
measured by abrasion loss, which is thought to be associated with the hardness of steel.
How would you test whether there is a statistically significant relationship between
resistance to wear and abrasion hardness of steel?
3. Your business purchases sheet stock from two different suppliers. It has found an
unacceptably large number of defects being caused by thickness beyond tolerance levels.
Data for overall mean thickness data was analyzed and found to be on target. Data was
collected that would identify a potential difference in the variation of the thickness of the
material by supplier.
4. Checks Are Us is a payroll processing firm. Timecard errors are routinely monitored and
recorded. A Black Belt investigating the errors wishes to determine if there are any
differences in the number of errors among five of its major customers. The number of
errors contained in a sample of 150 employees was recorded for five weeks. How would you
test if there is a statistically significant difference in the number of errors among the
customers?