Hypothesis (or not) question

webster111

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Feb 19, 2019
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I require some direction on this question please. I see no level of significance % and not sure how to tackle this question. Thank you.

Suppose you are offered an opportunity of sharing a small stand at a trade fair. The service provided by the stand is to assist job seekers in securing employment. The cost of the stand will be $5000, the cost of promotional material will be $500, and the partners include a cost of $300 for their time. The organizers of the fair claim that the likely number of inquiries will average out at 3000. Past experience has given a conversion rate of 5% of inquiries into actual jobs, and the partners work on an average profit of $50 per job. Assume that the inquiries are normally distributed with a standard deviation of 300. Would you take up the offer? Show details of your calculations

Thank you.
 
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Dr.Peterson

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Nov 12, 2017
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You are just asked if you would take up the offer -- that is, if you think it's worth it. What would be a good measure of that? Try something, and see if the numbers look good.

You might find the probability that you will break even, and see if that's high enough for you. If you want to express it as a test of the hypothesis that you will make money (or that you will make at least $___ profit), you can choose the level of significance you find appropriate.
 

webster111

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Feb 19, 2019
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Thank you, Dr Peterson, I will give it a go. Thank you for confirming the self-choice on the significance level.
 
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