Discuss the below:
Scenario: Your company must make a decision about a very large investment. An internal study shows that if demand for your product increases substantially from the current levels, new production lines must be set up to meet the demand at a reasonable cost and an acceptable quality level. Trying to meet the demand with current facilities will result in poor quality, loss of customer satisfaction and loss of business. But, if demand does not increase substantially the current production facilities will be adequate and the increased investment will not be required. In fact, if the investment is made when not required, the company's financial position will be harmed. A consensus is reached that "substantial increase" means greater than 50 units.
Assume the data is ratio level. Sample size will be 225. We do not know the population standard deviation. Use an alpha of 1%. What are the hypotheses? What model (do we use T or Z to figure this out) applies and why?