An administrator is frequently required to examine the profit margin of purchasing certain inventory. For example, the administrator might believe that it is more cost effective to buy a copier (B) and a service agreement (S) , than to lease it with service and parts covered. We may express the expectation that it is more cost effective as H1. The null hypothesis would then be Ho. To prove the hypothesis, the administrator would need to predict the costs of purchase, parts, and service; and compare them to the cost of a lease with all service and parts covered.
Sometimes, an administrator might compare one variable with another. For example, in healthcare we might expect the average length of stay required by patients with two or more diagnoses to exceed the average number of days of care used by those with only one diagnosis. We may express the expectation by claiming that on an average the length of stay required by those with a single diagnosis is less than or equal to the average number of days of care required by those with two or more diagnoses. For Example: Let M = Patients who are diagnosed with Multiple diagnoses. Let S = Patients who are diagnosed with single diagnosis. We could say that the null hypothesis, Ho : M < S; The alternative hypothesis, H1: M > S –
For the discussion this week, think of an instance when an administrator might use a hypothesis for quantitative analysis. State the hypothesis, null hypothesis, variables, and how the analysis would be done.