Discussion:
Q1: Provide a business example that you can apply Chi-square to and state the null and alternative hypothesis.
Example: There are 4 facilities that manufacture soap for the same company. The Company marketing the soap has had a significant increase in claims over the past few months. The claims are for broken bars, and visual imperfections. Because these can be caused by different processes in the manufacturing process, the Company is curious to know if a type of defect is independent of the manufacturing facility.
Null: The type of defects are independent of the manufacturing facility.
Alternative: The type of defects are dependent on the manufacturing facility.
Q2: Expanding on your example provided in Q1, design a contingency table that will hold your data. What are your degrees of freedom and critical value at a 0.05 confidence level? You do not need data to answer this. These are based off of the number of rows and columns in your table.
Example:
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Facility 1
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Facility 2
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Facility 3
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Facility 4
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Broken Bars
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Visual Defects
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df
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Confidence Level
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Critical Value
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(r-1)(c-1)
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0.05
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=CHIINV(.05,3)
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(1)(3)
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7.814727764
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3
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