RIF plan to fire older employees. Reducing the size of a | StudySoup

Textbook Solutions for Statistics for Business and Economics

Chapter 15 Problem 87SE

Question

Problem 87SE

RIF plan to fire older employees. Reducing the size of a company’s workforce in order to reduce costs is referred to as corporate downsizing or reductions in force (RIF) by the business community and media. Following RIFs, companies are often sued by former employees who allege that the RIFs were discriminatory with regard to age. Federal law protects employees over 40 years of age against such discrimination. Suppose one large company’s employees have a median age of 37. Its RIF plan is to fire 15 employees with ages listed in the table below.

43

32

39

28

54

41

50

62

22

45

47

54

43

33

59

a. Calculate the median age of the employees who are being terminated.

b. What are the appropriate null and alternative hypotheses to test whether the population from which the terminated employees were selected has a median age that exceeds the entire company’s median age?

c. Conduct the test of part b. Find the significance level of the test and interpret its value.

d. Assuming that courts generally require statistical evidence at the .10 level of significance before ruling that age discrimination laws were violated, what do you advise the company about its planned RIF? Explain.

Solution

Step 1 of 10

(a)

Find the median.

It is given that the total number of observations is 15. Then, the formula for median is as follows:

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Title Statistics for Business and Economics  12 
Author James T. McClave, P. George Benson, Terry T Sincich
ISBN 9780321826237

RIF plan to fire older employees. Reducing the size of a

Chapter 15 textbook questions

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