From the course: Six Sigma: Green Belt
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Tests for proportions
- When you flip a coin, you assume you have a fair coin, but if heads show up eight out of 10 times, you may start wandering if the coin is fair. So how do you evaluate that? Basically, you are dealing with proportions. Similarly in your Six Sigma projects, you may need to test for differences in proportions. To compare one proportion to a target value, use the one proportion test. The null hypothesis is that the proportion is equal to a target value. The alternate hypothesis is that the proportion is either less than, not equal to, or greater than the target value depending on the theory to be tested. For example, let's assume that management has set a target that defect rates should not exceed 10%. In our example, we found that out of 120 transactions processed, nine were defective. This means our sample defect rate is 7.5%, but we are interested in the long run defect rate. Is the long run defect rate less than 10%?…
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