A Company Manufacturing Computer Chips Finds That 8% of All

Essay

A company manufacturing computer chips finds that 8% of all chips manufactured are defective. Management is concerned that employee inattention is partially responsible for the high defect rate. In an effort to decrease the percentage of defective chips, management decides to offer incentives to employees who have lower defect rates on their shifts. The incentive program is instituted for one month. If successful, the company will continue with the incentive program.
-Based on the data they collected during the trial program, management found that a 95% confidence interval for the percentage of defective chips was (5.0%, 7.0%). What conclusion should management reach about the new incentive program? Explain.