Based on historical data, your manager believes that 34% of the company's orders come from first-time customers. A random sample of 137 orders will be used to estimate the proportion of first-time-customers. What is the probability that the sample proportion is less than 0.27?

Note: You should carefully round any z-values you calculate to 4 decimal places to match wamap's approach and calculations.

Answer =
(Enter your answer as a number accurate to 4 decimal places.)

1 answer

To determine the probability that the sample proportion is less than 0.27, we can use the normal approximation of the binomial distribution.

  1. Define the known parameters:

    • Population proportion (\( p \)): 0.34
    • Sample size (\( n \)): 137
    • Sample proportion to evaluate (\( \hat{p} \)): 0.27
  2. Calculate the mean and standard deviation of the sampling distribution:

    • The mean of the sampling distribution \( \mu_{\hat{p}} \) is given by: \[ \mu_{\hat{p}} = p = 0.34 \]
    • The standard deviation of the sampling distribution \( \sigma_{\hat{p}} \) is given by: \[ \sigma_{\hat{p}} = \sqrt{\frac{p(1-p)}{n}} = \sqrt{\frac{0.34(1-0.34)}{137}} \]

    First, calculate \( 1 - p \): \[ 1 - p = 1 - 0.34 = 0.66 \]

    Now compute \( \sigma_{\hat{p}} \): \[ \sigma_{\hat{p}} = \sqrt{\frac{0.34 \times 0.66}{137}} = \sqrt{\frac{0.2244}{137}} \approx \sqrt{0.00164} \approx 0.0405 \]

  3. Calculate the z-score: The z-score for the sample proportion \( \hat{p} = 0.27 \) is calculated as: \[ z = \frac{\hat{p} - \mu_{\hat{p}}}{\sigma_{\hat{p}}} = \frac{0.27 - 0.34}{0.0405} \] \[ z = \frac{-0.07}{0.0405} \approx -1.7284 \]

  4. Find the probability: We will look up the z-score in the standard normal distribution table (or use a calculator). The z-score of -1.7284 corresponds to a probability.

    Using standard normal distribution tables or calculators gives us: \[ P(Z < -1.7284) \approx 0.04211 \]

So, the probability that the sample proportion is less than 0.27 is approximately:

\[ \text{Answer} = 0.0421 \]

Thus, your answer is:

\[ \boxed{0.0421} \]