“Hypothesis testing is one of the fundamental concepts in both scientific research and business decision-making. It involves establishing a hypothesis (or guess!) about the outcome of an event or experiment and then gathering evidence (data) to make a decision on whether the hypothesis should be accepted or rejected” (Colorado Technical University Online, 2010a).

Null Hypothesis – H0

“The null hypothesis is the statement being tested. Often, the null hypothesis is a statement of ‘no difference’ or ‘no effect.’ The null hypothesis is not rejected unless there is convincing sample evidence that it is false” (Bowerman, O’Connell, & Orris, 2012). Say for example that a two liter of Coca-Cola is $1.89 at your local grocery store and …show more content…
Coke is the four-quadrant brand” (Graser, 2013).

Possible Null Hypothesis – H0

In 2013 Coca-Cola sponsored Taylor Swift in a series of Diet Coke commercials that were rolled-out using a variety of media platforms and set YouTube trends of more than 3.5 million views. If we know that teens like Sprite and we are looking to renew her contract, the null hypothesis may be that not renewing the contract would not adversely affect sales of Sprite.

Possible Alternative Hypothesis – H1

Using the same example as above, but adding in survey data from teens indicating that they buy Sprite because they love Taylor Swift, the alternative hypothesis may be that not renewing the contract will adversely affect sales of Sprite.

In conclusion, I hope this assists the senior manager with a general understanding of the topic and of course I will be available to answer any questions, comments or concerns he may have.

References

Bowerman, B. L., O’Connell, R. T., & Orris, J. B. (2012). Essentials of Business Statistics, (4th ed.). New York, NY: McGraw-Hill/Irwin

Colorado Technical University Online. (2010). MGMT600 Phase 3 activity: Hypothesis Testing [Multimedia presentation]. Retrieved from Colorado University Online Virtual Campus, MGMT600-1401B-02: https://campus.ctuonline.edu/courses/MGMT600/p1/hub1/hub.html

Drake, P. P. (n.d.). Hypothesis testing in a Nutshell. Retrieved March 5, 2014, from James Madison University: