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Carpetland salespersons average $8,000 per week in sales. Steve Contois, the firm’s vice president, proposes a compensation plan with new selling incentive. Steve hopes that the results of a trial selling period will enable him to conclude that the compensation plan increase the average sales per salesperson.
Carpetland salespersons average $8,000 per week in sales. Steve Contois, the firm’s vice president, proposes a compensation plan with new selling incentive. Steve hopes that the results of a trial selling period will enable him to conclude that the compensation plan increase the average sales per salesperson. a. Develop the appropriate null and alternative hypotheses.
b. What is the Type I error in this situation? What are the consequences of making this error?
c. What is the Type II error in this situation? What are the consequences of making this error?
Final answer:The appropriate null and alternativehypothesesfor the situation, the consequences of Type I and Type II errors in this context.Explanation:a. Null Hypothesis (H0): The compensation plan does not increase the average sales per salesperson. Alternative Hypothesis (H1): The compensation plan does increase the average sales persalesperson.b. Type I error occurs when the null hypothesis is rejected, but it is actually true. In this situation, it means concluding that the compensation plan increases the average sales per salesperson when it does not. The consequence is that the company may implement the compensation plan and incur unnecessary costs.c. Type II error occurs when the null hypothesis is accepted, but it is actually false. In this situation, it means concluding that the compensation plan does not increase the average sales per salesperson when it actually does. The consequence is that the company may miss out on the benefits of the compensation plan and fail to motivate its salespeople effectively.Learn more about Hypothesis testing here:brainly.com/question/34171008#SPJ12...