Question

Is Scanner Accuracy the Same for Specials?
In a study of store checkout scanning systems, samples of purchases were used to compare the scanned prices to the posted prices. The accompanying table summarizes results for a sample of 819 items. When stores use scanners to check out items, are the error rates the same for regular-priced items as they are for advertised-special items? How might the behavior of consumers change if they believe that disproportionately more overcharges occur with advertised special items?Regular Price Items Advertised special
Undercharged 20 7
Overcharged 15 29
Correct price 384 364

Answer 1

Use the Chi-square (X^2) method.

X^2 = ∑ (O-E)^2/E, where O = observed frequency and E = expected frequency.

∑ = sum of all the cells.

E = (column total * row total)/grand total

df = n - 1, where n = number of cells

Look up value in X^2 table in the back of your textbook.