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Chi square test

A wholesaler has recently developed a computerized sales invoicing system. Prior to implementing the new system, the manager of the store believes that the following are in fact the percentages of the number of the errors per invoice:

Errors per invoice 0 1 2 3 More than 3
Percentages .87 .08 .03 .01 .01

After implementing, the new system, a random sample of 500 invoices gives the following error distribution:

Errors per invoice 0 1 2 3 More than 3
Number of Invoices 479 10 8 2 1

Do you think that the original claim of the manager (prior to implementing the new system) is correct at a significance level of 5%?

2) State the null/alternative hypothesis verbally
3) State the null /alternative hypothesis symbolically
4) State the test statistic
5) State the rejection region

Please show all calculations for each.


Solution Summary

Step by step method for testing the hypothesis under 5 step approach is discussed here. Excel template for each problem is also included. This template can be used to obtain the answers of similar problems.