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Testing of Hypothesis and Production Levels

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Flash Jolt, a manufacturer of camera equipment, annually introduces new models in the fall of the year. At the conclusion of the Christmas season, retail dealers are contacted regarding their stock on hand of each piece of equipment. It has been discovered that unless 47% of the new equipment ordered by the retailers in the fall had been sold by Christmas, immediate production cutbacks are needed. At the end of the 2009 Christmas shopping season a survey of 100 dealers indicated that 45% of Flash Jolt equipment had been sold. It was decided to continue production levels at the current levels. The statistical test was conducted at the 0.05 level. Computed z = - 0.40.

Justify whether the decision to continue with production levels at the current levels was wrong or right?

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Solution Summary

The solution provides justification to a Testing of Hypothesis problem. The expert determines if the situation was correct.

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The decision was correct.

Explanation:
Let p be the percentage of sales of Flash Jolt equipment.
Here the null and ...

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