IEGR 351 Chapter 10: Inferences Concerning Proportions: Sections 10.1-10.3

IEGR 351
CHAPTER 10: INFERENCES CONCERNING

PROPORTIONS
Sections 10.1-10.3
Agenda
■ The Estimation of Proportions
■ Hypothesis Concerning One Proportion
■ Hypothesis Concerning Several Proportions
The Estimation of Proportions
■ This chapter will discuss how to do hypothesis testing on the proportions.
■ Some examples we can use to think about this are acceptance sampling or life testing of
a component.
■ The information we need to use to estimate a proportion is the number of times X, that
an appropriate event occurs in n trials, occasions, or observations.
■ The point estimator is denoted as the sample proportion or
■ If the n trials in our problems satisfies the assumptions in the binomial distribution we
can use the mean and standard deviation we can find mean and standard deviation of
the proportion of successes given by the following equations
𝑛𝑝
𝑛
= p∨
√ 𝑛𝑝 (1− 𝑝)
𝑛
=
𝑝 (1− 𝑝)
𝑛 √
Estimation of Proportions
■ The confidence interval associated with the proportion is as follows
■ The error equation associated with proportions is as follows
■ This is the equation to find the sample size if we know the

proportion
■ This is the equation to find the sample size if we do not know the
proportion
■ Let’s take a look at some examples

■ If x=36 of n=100 persons interviewed are familiar with the tax incentives for
installing certain energy-saving devices, construct a 95% confidence interval
for the corresponding true proportion.
■ And
■ Confidence Interval
■ We are 95% confident that the population proportion of the person familiar with the tax
incentive, p, is contained in the interval from 0.266 to 0.454.
■ In a sample survey conducted in a large city, 136 of 400 persons answered yes to the
question of whether their city’s public transportation is adequate. With 99% confidence
what can we say about the maximum error, if
■ is used as an estimate of the corresponding true proportion?
■ And
■ Suppose that we want to estimate the true proportion of defectives in a very large
shipment of adobe bricks, and that we want to be at least 95% confident that the error is
at most 0.04. How large a sample will we need if
■ We have no idea what the true proportion might be;
■ We know that the true proportion does not exceed 0.12?

Hypothesis Concerning One Proportion
■ Many methods used in sampling inspection, quality control, and reliability verification are based
on tests of null hypothesis that a proportion(percentage or probability) equals some specified
constant.
■ Based on the table below we will look at tests performed with approximate large sample tests
based on the normal approximation to the binomial distribution.
■ Null hypothesis:
■ Alternative hypothesis: , ,
■ This test is used when the desire to control the uniformity of a product or operation.
■ The test statistic used for this is below
■
Critical Regions for Testing (large sample)

Alternative Hypothesis Reject null hypothesis if:
or
Hypotheses Concerning One Proportion
■ Transceivers provide wireless communications among electronic components of
consumer products. Responding to a need for a fast, low-cost test of Bluetooth-capable
transceivers engineers developed a product test at the wafer level. In one set of trial with
60 devices selected from different wafer lots , 48 devices passed. Test the null
hypothesis p>0.70 at the 0.95 level of significance.
■ Parameter of interest:
■ Null hypothesis:
■ Alternative hypothesis:
■ Level of significance:
■ Test Statistic:
Hypothesis Concerning One Proportion
■ Criterion: Reject the null hypothesis if
■ Calculation:
■ Decision: Since is greater than , we reject the null hypothesis at level 0.05. In other
words, there is sufficient evidence to conclude that the proportion of good transceivers
that would be produced is greater than 0.70. The P-value, , somewhat
strengthens this conclusion.
Hypotheses Concerning Several Proportions
■ In this case we are testing whether two or more binomial
populations have the same parameter p. We are interested in the
null hypothesis being and the alternative hypothesis similar to we
have seen before.
■ Test Statistic for test concerning the difference between two

proportions is below
■ The large sample confidence interval for the difference between

two proportions is below
■ A study shows that 16 of 200 tractors produced on one assembly line required extensive
adjustments before they could be shipped, while the same was true for 14 out of 400 tractors
produced on another assembly line. At the 0.01 level of significance, does this support the
claim that the second production line does superior?
■ Parameter of interest:
■ Null hypothesis: this can also be written as
■ Alternative hypothesis:
■ Level of significance:
■ Test Statistic:
■ Criterion: Reject null hypothesis if , where Z is given by the formula
■ Calculations
■ Decision: Since exceed , the null hypothesis must be rejected; we conclude

that the true proportion of tractors requiring extensive adjustments is greater for the first
assembly line that for the send. The P-value is 0.0087
Hypothesis Concerning Several Proportions
■ With reference to the example on the previous slide let’s find the 95% confidence
interval.
■ The first assembly line has a rate of extensive adjustment between 3 and 87 out of 1,000
higher than the rate for the second assembly

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IEGR 351

CHAPTER 10: INFERENCES CONCERNING

■ The error equation associated with proportions is as follows

■ This is the equation to find the sample size if we know the

■ Let’s take a look at some examples

■ We know that the true proportion does not exceed 0.12?

Critical Regions for Testing (large sample)

■ Test Statistic for test concerning the difference between two

■ The large sample confidence interval for the difference between

■ Decision: Since exceed , the null hypothesis must be rejected; we conclude

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