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Fashion Industries: Confidence Interval for Applicants' Condition of Employment (Drug Test)

As a condition of employment, Fashion Industries applicants must pass a drug test. Of the last 220 applicants 14 failed the test. Develop a 99 percent confidence interval for the proportion of applicants that fail the test. Would it be reasonable to conclude that more than 10 percent of the applicants are now failing the test? In addition to the testing of the applicants, Fashion Industries randomly tests its employees through out the year. Last year in the 400 random tests conducted, 14 employees failed the test. Would it be reasonable to conclude that less than 5 percent of th employees failed the test. Would it be reasonable to conclude that less than 5 percent of the employees are not able to pass the random drug test?

Book: Lind-Marchal-Wathen Statistical Techniques in Business and Economics 13thed (2008).
Chapter 9, pg 320, Exercise 46

Solution Summary

The solution provides step by step method for the calculation of confidence interval for population proportion of applicants that fail the drug test. Formula for the calculation and Interpretations of the results are also included. This solution includes an attached Word document with discussion and work is provided in an attached Excel file.

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