How accurate are price scanners? Recent customer complaints about items being scanned for prices higher than listed, or mis-scans. This has prompted a large national grocery chain to audit its newly installed price scanners at one of its stores. Industry standards account for 2% of items to be mis-scanned. The statistical hypotheses to be tested are:
H0: p = 0.02
H1: p > 0.02
(a) Statistical testing will be carried out at a = 0.15. The grocery chain will randomly pick, scan, and compute the proportion of 500 items that are mis-scanned. What value of this sample proportion will indicate that more than 2% of the time items at this grocery store are mis-scanned? Find the value of Pcritical.
Pcritical = 0.0303 (use at least four decimals in your answer)