The Electronic Controls Company (ECCO) is one of the largest makers of backup alarms in the world. Backup alarms are the safety devices that emit a high-pitched beeping sound when a truck, forklift, or other equipment is operated in reverse. ECCO is well known in the industry for its high quality and excellent customer service, but some products are returned under warranty due to quality problems. ECCO’s operations manager recently stated that less than half of the warranty returns are wiring-related problems. To verify if she is correct, a company intern was asked to select a random sample of warranty returns and determine the proportion that were returned due to wiring problems. The data the intern collected are shown in the data file called ECCO.
a. State the appropriate null and alternative hypotheses.
b. Conduct the hypothesis test using α = 0.02 and provide an interpretation of the result of the hypothesis test in terms of the operation manager’s claim.