Recall that the National Institute for Standards and Technology (NIST) mandates that for every 100 items scanned through the electronic checkout scanner at a retail store, no more than two should have an inaccurate price. A study of random items purchased at California WalMart stores found that 8.3% had the wrong price (Tampa Tribune, Nov. 22, 2005). Assume that the study included 1,000 randomly selected items.
a. Identify the population parameter of interest in the study.
b. Set up H0 and Ha for a test to determine if the true proportion of items scanned at California WalMart stores exceeds the 2% NIST standard.
c. Find the test statistic and rejection region (at α = .05) for the test.
d. Give a practical interpretation of the test.
e. What conditions are required for the inference, part d, to be valid? Are these conditions met?
For Information: Refer to Exercise 6.127 and the study of the accuracy of checkout scanners at WalMart stores in California.