SIGNIFICANCE TESTING 595
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the expansion of (q+p)N, taken from the left. Thus:
Number of Probability
defective
components
0 qN
1 NqN−^1 p
2
N(N−1)
2!
qN−^2 p^2
3
N(N−1)(N−2)
3!
qN−^3 p^3 ...
Poisson approximation to a binomial distribution
WhenN≥50 andNp<5, the Poisson distribution is
approximately the same as the binomial distribution.
In the Poisson distribution, the expectationλ=Np
and from Chapter 57, the probability of 0, 1, 2, 3,...
defective components in a random sample of N
components is given by the successive terms of
e−λ
(
1 +λ+
λ^2
2!
+
λ^3
3!
+···
)
taken from the left. Thus,
Number of defective 01 2 3
components
Probability e−λ λe−λ
λ^2 e−λ
2!
λ^3 e−λ
3!
Normal approximation to a binomial distribution
When bothNpandNqare greater than 5, the nor-
mal distribution is approximately the same as the
binomial distribution, The normal distribution has a
mean ofNpand a standard deviation of
√
(Npq).
Problem 1. Wood screws are produced by
an automatic machine and it is found over a
period of time that 7% of all the screws pro-
duced are defective. Random samples of 80
screws are drawn periodically from the output of
the machine. If a decision is made that produc-
tion continues until a sample contains more than
7 defective screws, determine the type I error
based on this decision for a defect rate of 7%.
Also determine the magnitude of the type II error
when the defect rate has risen to 10%.
N=80, p= 0 .07, q= 0. 93
Since bothNpandNqare greater than 5, a normal
approximation to the binomial distribution is used.
Mean of the normal distribution,
Np= 80 × 0. 07 = 5. 6
Standard deviation of the normal distribution,
√
(Npq)=
√
(80× 0. 07 × 0 .93)= 2. 28
Atype I erroris the probability of rejecting a
hypothesis when it is correct, hence, the type I error
in this problem is the probability of stopping the
machine, that is, the probability of getting more than
7 defective screws in a sample, even though the
defect rate is still 7%. Thez-value corresponding
to 7 defective screws is given by:
variate−mean
standard deviation
=
7 − 5. 6
2. 28
= 0. 61
Using Table 58.1 of partial areas under the stan-
dardised normal curve given on page 561, the area
between the mean and az-value of 0.61 is 0.2291.
Thus, the probability of more than 7 defective screws
is the area to the right of thezordinate at 0.61, that is,
[total area−(area to the left of mean
+area between mean andz= 0 .61)]
i.e. 1−(0. 5 + 0 .2291). This gives a probability of
0.2709. It is usual to express type I errors as a
percentage, giving
type I error= 27 .1%
Atype II erroris the probability of accepting a
hypothesis when it should be rejected. The type II
error in this problem is the probability of a sample
containing less than 7 defective screws, even though
the defect rate has risen to 10%. The values are now:
N=80, p= 0 .1, q= 0. 9
AsNpandNqare both greater than 5, a normal
approximation to a binomial distribution is used, in
which the meanNpis 80× 0. 1 =8 and the standard
deviation
√
(Npq)=
√
(80× 0. 1 × 0 .9)= 2 .68.
Thez-value for a variate of 7 defective screws is
7 − 8
2. 68
=− 0 .37.
Using Table 58.1 of partial areas given on
page 561, the area between the mean andz=− 0. 37
is 0.1443. Hence, the probability of getting less than
7 defective screws, even though the defect rate is