Question
The Discovery Medical Aid Board wanted to find out if the mean time to settle medical claims of members differs between two major medical schemes
The Discovery Medical Aid Board wanted to find out if the mean time to settle medical claims of members differs between two major medical schemes - the Green-Aid Fund and the Explorer Blue Fund. Fifty Green-Aid Fund medical claims received were randomly selected and monitored, and the sample mean time to settlement was 20.8 days. Assume a population standard deviation of 8.2 days for settlement times of Green-Aid Fund claims. For a random sample of 45 Explorer Fund medical claims received, the average time to settlement was 18.4 days. Assume a population standard deviation of 6.3 days for settlement times of Explorer Blue Fund claims. Assume settlement times are normally distributed. Can the Discovery Medical Aid Board conclude that the Green-Aid Fund settles claims slower, on average, than the Explorer Blue Fund? Formulate the null and alternative hypothesis and test this hypothesis at the 7% significance level. What conclusion can be drawn? (10)
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