A large distriutor of cosmetics has kept his outstanding accounts receivable to a mean age of 18 days over the past year. This average is considered a standard by which to measure the efficiency of the credit and collections department. Management wishes to check if receivables in the current month is over standard and will do this at a significance level of 0.50. A random sample of 100 accounts yields an average of 20 days with a standard deviation of 9 days. what should management conclude? --


I think there is a typo here and the level of significance should br 0.05. In this case,

. Usisng usual test statistics for large sample test for testing hypotheses conserning a population mean, we find From the z-tables I find the p-value tp be 0.0132. Since significance level is only 0.05 I conclude that sample supprots the claim that receivables are over standard.

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