A company manufacturing computer chips finds that 8% of all chips manufactured are defective. Management is concerned that employee inattention is partially responsible for the high defect rate. In an effort to decrease the percentage of defective chips, management decides to offer incentives to employees who have lower defect rates on their shifts. The incentive program is instituted for one month. If successful, the company will continue with the incentive program. 1) Match the appropriate null and alternative hypotheses in this setting. ) Ho a. P.08 |H b. Ps .08 с. Р» .08 d. P<.08 e. P2 .08 f. P..08 2) Match a type I and type |l error in context. ) Type II Error ) Type I Error a. Thinking the incentive program helped decrease the defect rate - when it actually didn't help b. Thinking the incentive program helped decrease the defect rate when it actually did c. Thinking the incentive program didn't raise the defect rate when it actually didn't. d. Thinking the incentive program didn't help decrease the defect rate - when it actually did help 3) Which error, the Type I or the Type II do you consider a worse mistake? Select an answer

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**Company Chip Defect Case Study**

A company manufacturing computer chips finds that 8% of all chips manufactured are defective. Management is concerned that employee inattention is partially responsible for the high defect rate. In an effort to decrease the percentage of defective chips, management decides to offer incentives to employees who have lower defect rates on their shifts. The incentive program is instituted for one month. If successful, the company will continue with the incentive program.

**1) Hypothesis Testing**

Match the appropriate null and alternative hypotheses in this setting.

- \( H_0 \)
  - (Options: a. P = .08, b. P ≤ .08, c. P > .08, d. P < .08, e. P ≥ .08, f. P ≠ .08)

- \( H_1 \)
  - (Options: a. P = .08, b. P ≤ .08, c. P > .08, d. P < .08, e. P ≥ .08, f. P ≠ .08)

**2) Type I and Type II Errors**

Match a type I and type II error in context.

- **Type I Error:**  
  (Options: a. Thinking the incentive program helped decrease the defect rate - when it actually didn’t help, b. Thinking the incentive program helped decrease the defect rate when it actually did)

- **Type II Error:**  
  (Options: c. Thinking the incentive program didn’t raise the defect rate when it actually didn’t, d. Thinking the incentive program didn’t help decrease the defect rate - when it actually did help)

**3) Error Analysis**

Which error, the Type I or the Type II, do you consider a worse mistake?

- [Select an answer]

**4) Limiting Errors**

How would you limit the probability of making this error (that you stated in Question 3)?

- [Select an answer]

**5) Increasing Other Error Probabilities**

Doing this (your action in Question 4) would increase the probability of making a:

- [Select an answer]
Transcribed Image Text:**Company Chip Defect Case Study** A company manufacturing computer chips finds that 8% of all chips manufactured are defective. Management is concerned that employee inattention is partially responsible for the high defect rate. In an effort to decrease the percentage of defective chips, management decides to offer incentives to employees who have lower defect rates on their shifts. The incentive program is instituted for one month. If successful, the company will continue with the incentive program. **1) Hypothesis Testing** Match the appropriate null and alternative hypotheses in this setting. - \( H_0 \) - (Options: a. P = .08, b. P ≤ .08, c. P > .08, d. P < .08, e. P ≥ .08, f. P ≠ .08) - \( H_1 \) - (Options: a. P = .08, b. P ≤ .08, c. P > .08, d. P < .08, e. P ≥ .08, f. P ≠ .08) **2) Type I and Type II Errors** Match a type I and type II error in context. - **Type I Error:** (Options: a. Thinking the incentive program helped decrease the defect rate - when it actually didn’t help, b. Thinking the incentive program helped decrease the defect rate when it actually did) - **Type II Error:** (Options: c. Thinking the incentive program didn’t raise the defect rate when it actually didn’t, d. Thinking the incentive program didn’t help decrease the defect rate - when it actually did help) **3) Error Analysis** Which error, the Type I or the Type II, do you consider a worse mistake? - [Select an answer] **4) Limiting Errors** How would you limit the probability of making this error (that you stated in Question 3)? - [Select an answer] **5) Increasing Other Error Probabilities** Doing this (your action in Question 4) would increase the probability of making a: - [Select an answer]
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