Explain the meaning of a type i error in given context

Reference no: EM131384594

A health care facility is monitoring daily expenditures for a certain diagnosis-related group (DRG). Individual observations are selected. After 50 samples, the average and standard deviation of daily expenditures (in hundreds of dollars) are estimated to be 15 and 2, respectively.

(a) Find the 3σ control limits.

(b) Suppose that Rules 1 and 2 are used simultaneously for the detection of out-of control conditions. Assuming independence of the rules, what is the overall probability of a type I error? Explain the meaning of a type I error in this context.

(d) Suppose that the average daily expenditures for the same DRG increases to $1750. What is the chance of detecting this shift by the second sample drawn after the shift using Rule 1?

Reference no: EM131384594

Questions Cloud

What is the overall probability of a type i error : Suppose that Rules 2 and 3 are used simultaneously to determine out-of-control conditions. What is the overall probability of a type I error assuming independence of the rules?

How many samples will be analyzed before detecting a change : On average, how many samples will be analyzed before detecting a change in the process mean? Assume that the process mean is now at 110 mm (having moved from 105 mm) and that the process standard deviation is 6 mm. Samples of size 4 are selected f..

Prepare a marketing plan : you will submit a substantial draft to your instructor for grading and feedback. Be sure to download the Marketing Plan outline. It must be used! It is recommended that you start working on your draft in Week 2 after your instructor has approved y..

Explain a type i and type ii error specifically in context : Find the 2σ and 3σ control limits for the average delivery time.- Explain a type I and type II error specifically in this context.

Explain the meaning of a type i error in given context : Suppose that Rules 1 and 2 are used simultaneously for the detection of out-of control conditions. Assuming independence of the rules, what is the overall probability of a type I error? Explain the meaning of a type I error in this context.

Choose one of the professional scenarios provided : Choose one of the professional scenarios provided. Write a Block Business Letter (in the form of the posted example from Week 4) from the perspective of the company management. It should provide bad news and follow the guidelines outlined in Chap..

What are the warning limits : What are the warning limits? If the turnaround time for a test is found to be 40 minutes, is the process in control? Should one consider remedial actions in this situation?

Describe the use of the pareto concept : What are the advantages and disadvantages of using variables rather than attributes in control charts?- Describe the use of the Pareto concept in the selection of characteristics for control charts.

Why do you think managers have difficulty delegating : What is your level of personal interest in becoming an independent entrepreneur? Why did you rate yourself as you did?How would you assess your capability of becoming a successful entrepreneur? What are your strengths and weaknesses? How would you ..

User Account

All Pages