SOLUTION: A local dairy is considering the possibility of ceasing home deliveries in an effort to minimize cost increases for its products. In a survey of 100 randomly selected customers who

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Question 818453: A local dairy is considering the possibility of ceasing home deliveries in an effort to minimize cost increases for its products. In a survey of 100 randomly selected customers who currently receive home delivery, 64 customers indicated that they were in favor of this economy measure. The dairy will cease home deliveries if the results of the survey indicate (at alpha = 0.01) that at least 60% of all home delivery customers favor the proposal. What decision should the dairy make?
Answer by stanbon(75887) About Me  (Show Source):
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A local dairy is considering the possibility of ceasing home deliveries in an effort to minimize cost increases for its products.
In a survey of 100 randomly selected customers who currently receive home delivery, 64 customers indicated that they were in favor of this economy measure. The dairy will cease home deliveries if the results of the survey indicate (at alpha = 0.01) that at least 60% of all home delivery customers favor the proposal. What decision should the dairy make?
Ho: p >= 0.60
Ha: p < 0.60
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p-hat = 64/100 = 0.64
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z(0.64) = (0.64-0.60)/sqrt(0.60*0.40/100) = 0.04/sqrt(24) = 0.8165
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p-value = P(z > 0.8165) = 0.2071
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Conclusion: Since the p-value is greater than 1% fail to reject Ho.
The dairy should continue home delivery.
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Cheers,
Stan H.
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