Micron Electronics makes personnel computers that are then sold directly over the phone and over the Internet. One of the most critical factors in the success of PC makers is how fast they can turn their inventory of parts. Faster inventory turns means lower average inventory cost. Recently at a meeting, the VP of manufacturing said that there is no reason to continue offering hard disk drives that have less than a 100 GB storage capacity since only 10% of Micron customers ask for the smaller hard disks. After much discussion and debate about the accuracy of the VP's figure, a sample of 50 orders from the past week's sales was taken. This sample revealed 7 requests for drives with less than 100 GB capacity.
a. Determine the probability of finding 7 or more requests for hard disk drives with low storage capacity if the VP's assertion is correct. Do you believe that the proportion of customers requesting hard drives with low storage capacity is smaller than 0.10? Explain.
b. Suppose a second sample of 50 customers was selected. This sample again yielded 7 requests for less than a 100 GB drive. Combining this sample information with that in part a, what conclusion would you now reach regarding the VP's 10% claim? Base your answer on probability.