Question

1. A certain store has four ways of handling returns: cash refund, credit to account, exchange, or refusal. The manager claims that the four ways are equally probable.to test this hypothesis, 108 customers were sampled with the following results

Type Cash Credit exchange Refusal

Count 34 27 32 15

Does the data support the manager’s claim at 5 %.

Answer 1

Apply chi-square test.

The value of the statistic is 8.0747. The critical value for 4-1=3 degrees of freedom is

$\chi^2(0.95,3)=7.8147>8.0747$

Thus the null hypothesis of equal probability is declined. The data don't support manager's claim.