A wholesaler has recently developed a computerized sales invoicing system. Prior to implementing this system, a manual system was used. Historically, the manual system produced 87% of invoices with 0 errors, 8% of invoices with 1 error, 3% of invoices with 2 errors, 1% of invoices with 3 errors, and 1% of invoices with more than 3 errors.
After implementation of the computerized system, a random sample of 500 invoices showed 479 invoices with 0 errors, 10 invoices with 1 error, 8 invoices with 2 errors, 2 invoices with 3 errors, and 1 invoice with more than 3 errors.
- Create appropriate null and alternative hypotheses.
- Justify the appropriate chi-square test to determine whether the error percentages for the computerized system differ from the normal system.
- The chi-square statistic and p-values are 35.22 and < 0.0001. Interpret the p value for an accept/reject decision regarding the hypothesis. Choose the standard level of significance.
- State your conclusion.