Under Ho the distribution of failures x is Binomial (900, 0.34)

Expected Value E(x) = 900 * 0.34 = 306

Var (x)= 900 * 0.34 *0.66= 201.96

Critical value is 2.33 (2 sided with p =0.02)

Using approximation z -score critical statistic for x

l(x – 306)l/ √201.96 = 2.33

x = 306 + 33.1122 or 306 -33.1122

x = 339.1122 or 272.8878

( 37.68% or 30.32%)

Decision Rule Reject Ho if percentage of faults is over 37.68% or under 30.32%

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