Answer to Question #314278 in Statistics and Probability for EDWIN

Question

Q1.a).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 managers claim at 5 %.                                                              (6mks)

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.