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Arlecino [84]
3 years ago
6

The CEO of a large electric utility company claims that 80 percent of his 1,000,000 customers are very satisfied with the servic

e they receive. To test this claim, the local newspaper surveyed 100 customers, using simple random sampling. After performing the appropriate statistical test, they find the p-value to be 0.894. What conclusion can we make?
Mathematics
1 answer:
Oksana_A [137]3 years ago
4 0

Answer:

Conclusion: The proportion of customers satisfied with the service they receive from the large electric utility company is different from 80%, the claim made by the CEO.

Step-by-step explanation:

To test the claim made by the CEO of a large electric utility company the newspaper must conduct a hypothesis test for one proportion.

<u>Assumption</u>:

The significance level (<em>α</em>) of the test can be assumed to be 5%.

<u>Hypothesis</u>:

H_{0}: The proportion of customers satisfied with the service they receive is 0.80, i.e. p=0.80

H_{a}: The proportion of customers satisfied with the service they receive is different from 0.80, i.e. p\neq 0.80

<u>Decision Rule</u>:

If the <em>p</em>-value of the test is less than the significance level (<em>α</em>) then the null hypothesis may be rejected. But if the <em>p</em>-value  is more than the significance level (<em>α</em>) then we cannot reject the null hypothesis.

<u>Test Statistics:</u>

As the sample size is large, i.e.<em>n</em> = 100 > 30, then according to the central limit theorem sampling distribution of sample proportion will follow the normal distribution.

The test statistic used is:

z=\frac{\hat p-p}{\frac{\sqrt{p(1-p)}} {n} }

<u>Given</u>:

The <em>p</em>-value of the hypothesis test is computed to be 0.894.

That is:

p-value=0.894>\alpha =0.05

This implies that we fail to reject the null hypothesis at 5% level of significance.

<u>Conclusion</u>:

The null hypothesis was failed to be rejected at 5% level of significance.

Thus, concluding that the proportion of customers satisfied with the service they receive from the large electric utility company is different from 80%, the claim made by the CEO.

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