Question

An article in Fortune magazine discussed “outsourcing.” According to the article, outsourcing is “the assignment of critical, but noncore, business functions to outside specialists.” This allows a company to immediately bring operations up to best- in- world standards while avoiding huge capital investments. The article included the results of a poll of business executives addressing the benefits of outsourcing.
a. Suppose we wish to use the poll’s results to justify the claim that fewer than 20 percent of business executives feel that the benefits of outsourcing are either “less or much less than expected.” The poll actually found that 15 percent of the respondents felt that the benefits of outsourcing were either “ less or much less than expected.” If 1,000 randomly selected business executives were polled, and if for the sake of argument, we assume that 20 percent of all business executives feel that the benefits of outsourcing are either less or much less than expected ( that is, p .20), calculate the probability of observing a sample proportion of .15 or less. That is, calculate p (p ≤.15).
b. Based on the probability you computed in part a, would you conclude that fewer than 20 percent of business executives feel that the benefits of outsourcing are either “less or much less than expected”? Explain.


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  • CreatedMay 28, 2015
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