An airline\'s data indicate that 50 percent of people who begin the online proce

Question

An airline's data indicate that 50 percent of people who begin the online process of a booking flight never complete the process and pay for the light. To reduce this percentage, the airline is considering changing its website so that the entire booking process, including flight and seat selection and payment, can be done on two simple pages rather than the current four pages. A random sample of 300 customers who begin the booking process are exposed to the new system, and 117 of them do not complete the process. Formulate the null and alternative hypotheses needed to attempt to provide evidence that the new system has reduced the noncompletion percentage. Use critical values and a p-value to perform the hypothesis test by setting a equal to .10, .05, .01, and 001.

Explanation / Answer

a) here null hypothesis: p=0.5

and alternate hypothesis: p<0.5

for std error =(p(1-p)/n)1/2 =0.0289

also phat =117/300 =0.39

hence zstat =(phat-p)/std error =-3.8105

for above test stat p value =0.00007

as p vlaue is less then 0.1,0.05 ,0.01 and 0.001 level we reject null hypothesis on all these levels and conclude that % has reduced

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