A truck company wants on-time delivery for at least 98% of the parts they order

Question

A truck company wants on-time delivery for at least 98% of the parts they order from a metal manufacturing plant. They have been ordering from Hudson Manufacturing but will switch to a new, cheaper manufacturer (Steel-R-Us) unless there is evidence that this new manufacturer cannot meet the minimum 98% on-time goal. As a test the truck company purchases a random sample of metal parts from Steel-R-Us and then determines if these parts were delivered on-time. Which hypotheses should they test?

H0: p = 0.98    HA: p 0.98

H0: p 0.98    HA: p < 0.98

H0: p 0.98    HA: p = 0.98

H0: p = 0.98    HA: p > 0.98

H0: p 0.98    HA: p > 0.98

H0: p = 0.98    HA: p 0.98

H0: p 0.98    HA: p < 0.98

H0: p 0.98    HA: p = 0.98

H0: p = 0.98    HA: p > 0.98

H0: p 0.98    HA: p > 0.98

Explanation / Answer

Here the company wants to check if there is evidence that the new manufacturer can't actually provide a delivery rate of atleast 98%.

So the correct hypotheses for this case are:

H0: p >= 0.98

Ha: p < 0.98

Hope this helps !

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