Part 2: Statistical method

2.1. descriptive

Problem:

Number of defects 0 1 2 3 9
Number of days 8 22 33 29 18

1. HO: The sequence of numbers follows the binomial distribution

H1: The sequence of numbers not follows the binomial distribution

2. Calculate the critical value of c2

Specify the level of significance. We take this as 5%.

3. Calculate the critical value of x2

There are 5 groups – but we also need to find one para- meter for the binomial
distribution, which is the probability of success. So the number of degrees of freedom is:
number of classes − number of estimated parameters − 1 = 6 − 2 − 1 = 3

Looking up the critical value for a significance level of 5% and degrees of freedom gives
a critical value of 7.81.

Total of ingredients was defects each days

(8x0) + (22x1) + (33x2) + (29x3) + (4x15) + (5x3) = 250

Total days = 110 x 5 = 550

So the probability that ingredients defects each day is 250 : 550 = 0.45. Now we can find
the probabilities of 0, 1, 2, 3, 4 etc. when the probability of not success is 0.125, using the
binomial calculations described in Chapter 13 (or the tables in Appendix B or statistical
software). The probability of no successes is 0.263, the probability of one success is
0.376, the probability of two successes is 0.242 and so on. Multiplying these probabilities
by the number of postcodes, 100, gives the expected number of postcodes with each
number willing to pay higher charges. For convenience, we have taken the last class as ‘4
or more’.

Number of defects 0 1 2 3 4 or more

Probability 0.0503 0.2059 0.3369 0.2757 0.1313
Expected number 5.533 22.649 37.059 30.327 14.443

We now have both the expected and observed postcode distributions. and is capable of
calculating the value of x^2

( O-
Frequency Observation Expected ( O-E) ( O-E)^2 E)^2/E
0 8 5,533 2,467 6,086 1,100
1 22 22,469 -0,469 0,220 0,010
2 33 37,059 -4,059 16,475 0,440
3 29 30,327 -1,327 1,761 0,058
4 or more 18 14,443 3,557 12,652 0,876
Total

Frequenc Observatio Expecte ( O- ( O-

( O-E)
y n d E)^2 E)^2/E
0 8 5.533 2.467 6.086 1.1
1 22 22.469 -0.469 0.22 0.01
2 33 37.059 -4.059 16.475 0.44
3 29 30.327 -1.327 1.761 0.058
4 or more 18 14.443 3.557 12.652 0.876
Total 110 110 2.484

Determine whether or not the null hypothesis should be rejected. We cannot reject the
null hypothesis since the actual value of c2 (2.484) is smaller than the critical value
(7.81).

6 Finally, state your conclusion. The evidence backs up the idea that the observations are
distributed in a binomial fashion.