2. The personnel director of a large insurance company is interested in reducing

Question

2. The personnel director of a large insurance company is interested in reducing the turnover rate of data processing clerks in the first year of employment. Past records indicate that 25 percent of all new hires in this area are no longer employed at the end of one year. Extensive new trai approaches are implemented for a sample of 150 new data processing clerks. At the end of a one- year period, 29 is there evidence that the proportion of data processing clerks who have gone through the ne training and are no longer employed is less than 25? If not, does personnel need to review and possibly revise its new training approach? of these 150 individuals are no longer employed. At the.01 level of significance,

Explanation / Answer

here we use z-test with

null hypothesis H0:p=0.25 and

alternate hypothesis H1:p<0.25

P=29/150=0.1933

and statistic z=(P-p)/sqrt(p(1-p)/n)=(0.1933-0.25)/sqrt(0.25*(1-0.25)/150)=-1.6037

one tailed critical z(0.01)=2.3264 is more than absolute value of calculated z=1.6037, so we accept H0 and conclude that there is not sufficient evidence that proprotion of data processing clerks who have gone throgh the new training and are no longer employed is less than 0.25.

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