Hypothesis Testing
Statistical hypothesis testing techniques are useful in simulation experiments for determining whether responses from simulations with different decision variable values are statistically significant.
Steps taken in hypothesis testing:
1. State the hypothesis to be tested, i.e., establish the null hypothesis H0 and the alternate hypothesis H1.
2. Determine and acceptable risk of rejecting a true null hypothesis (set ? at some level).
3. Choose some suitable test statistic by which to test H0.