Question

A binomial probability guide to decision making.

A manufacturer of external hard drives claims that only 10% of his drives require repairs within the warranty period of 12 months. If 5 of 20 of his drives required repair within the first year, does this trend tend to support or refute the claim.

Please provide a detailed answer and an explanation.

Answer 1

Solution:

We are given:

The probability that 5 or more require a repair within the first year is:

Since this probability is less than 0.05, it would seem reasonable to reject the hard drive manufacturer’s claim.