Single population proportion

• Examples of research questions

What proportion of golf balls are undersized?
What percentages of employees are union members?
• Worked example
 An auditor claims that 10% of invoices for a company
are incorrect. To test this claim a random sample of
100 invoices are checked and 12 are found to be
incorrect. Test, at the 5 percent level of significance if
the auditor’s claim is supported by the sample
evidence
 Single population proportion
• Management question
• Is the claim made by the auditor true?
• Solution
• Step 1: Define the null and alternative
hypothesis

H 0 :   0.1
H 1 :   0.1
 Single population proportion
• Step 2: Compute the sample test statistics
The sample statistic is the single sample
proportion, p, which is defined as the proportion
of invoices which are incorrect
Given x = 12; n = 100, then p = 12/100 =0.12 and
sample test statistic is
p 0.12  0.10
z  statistic    0.67
 * 1    0.10 * 0.9
n 100
 Single population proportion
• Step 3: Decision rule
• Region of acceptance is -1.96 to 1.96
• Step 4: compare the sample evidence to the decision
rule
• Statistical conclusion
Accept the null hypothesis
• Management conclusion
There is no significant sample evidence to prove the
auditor’s claim that 10% of the invoices for the company
are incorrect
 Single population proportion
• Example 2:
• A manufacturer claims that his market share is
seventy percent. However, a random sample
of one thousand customers reveals that only
six hundred and fifty are users of his product.
Test the manufacturer’s claim at 5% level of
significance and interpret the results