Assume you wish to state that less than 0.5% (0.005) of your cables are defective.
a. How many observations should you take so that you can employ the normal approximation?
b. Generate the set of n observations from the binomial distribution with 1 trial and event probability of 0.007, where n is your answer from
a. Using the normal approximation, compute the test statistic and rejection criteria (by hand/calculator).
c. Using your answers to b, conduct the hypothesis test to find out if the probability is equal to 0.005 or greater than 0.005. Given that you know the actual event probability