IBM Inc. is going to award a contract for fine-line pens to be used nationally in its offices. Two suppliers, Bic and Pilot, have submitted bids. To determine the preference of office employees, brokers, and others, a personal preference test is to be conducted using a randomly selected sample of 20 employees. The .05 level of significance is to be used.
a. If the alternate hypothesis states that Bic is preferred over Pilot, is the sign test to be conducted as a one-tailed or a two-tailed test? Explain.
b. As each of the sample members told the researchers his or her preference, a “1” was recorded if it was Bic and a “2” if it was the Pilot fine-line pen. A count of the pluses revealed that 12 employees preferred Bic, 5 preferred Pilot, and 3 were undecided. What is n?
c. What is the decision rule in words?
d. What conclusion did you reach regarding pen preference? Explain.