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A manufacturer of CDs claims that 99.4% of its CDs are defect-free. A large software company that buys and uses large numbers of the CDs wants to verify this claim, so it randomly selects 1600 CDs to be tested. The tests reveal 19 CDs to be defective.

  1. Assuming that the manufacturer’s claim is correct; would it be unusual to have at least 19 defective CDs?
  2. Based on your answer to part (1), should finding 19 defective CDs out of 1600 randomly selected CDs cause you to doubt the manufacturer’s claim? Explain.
  3. Assuming that the manufacturer’s claim is correct, within what limits would you expect the number of defective CDs to fall?
  4. Based on your answer to part (3), should finding 19 defective CDs out of 1600 randomly selected CDs cause you to doubt the manufacturer’s claim? Explain.
  • 1
    I would doubt the manufacturer's claim without even testing any CD's just because of the source.2012-10-26

1 Answers 1

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Using Binomial distribution, the probability of a 'successful' event is $p_d = .006$. Hence, the probability of 19 'successes' out of 1600 'trials' is $ P(E)=\binom{1600}{19}p_d^{19} (1-p_d)^{1600-19}=p $

Next thing you need to do is compare $p$ to the observed proportion of 'successes' in the sample: $\hat{p}=\frac{19}{1600}=0.011875$ and decide if the difference $|p-\hat{p}|$ is different from 0 at the desired level of significance