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Mary is the manager of a new clothing shop

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Mary is the manager of a new clothing shop. The shop located in a new shopping mall and Mary wants to estimate the average daily demand for her clothes. From her own experience, she believes that the mean daily demand of her clothes in this region should be greater than or equal to 100. She is going to perform a survey to test this claim and the result will be used to decide how many clothes should be maintained every morning in order to satisfy the customers' needs.

(a) What is the implication of Type I error in this case? Answer

"Surplus of clothes"

"Shortage of clothes"

(b) What is the implication of Type II error in this case? Answer

"Surplus of clothes"

"Shortage of clothes"

(c) Which type of error is more significant (important), for Mary, in this case? Answer

"Type I error"

"Type II error"