Question: Fried PCs. A computer company recently experienced a disastrous fire that ruined some of its inventory. Unfortunately, during the panic of the fire, some of the damaged computers were sent to another warehouse, where they were mixed with undamaged computers. The engineer responsible for quality control would like to check out each computer in order to decide whether it's undamaged or damaged. Each computer undergoes a series of 100 tests. The number of tests it fails will be used to make the decision. If it fails more than a certain number, it will be classified as damaged and then scrapped. From past history, the distribution of the number of tests failed is known for both undamaged and damaged computers. The probabilities associated with each outcome are listed in the table below:
The table indicates, for example, that 80% of the undamaged computers have no failures, while 70% of the damaged computers have 2 failures.
a) To the engineers, this is a hypothesis-testing situation. State the null and alternative hypotheses.
b) Someone suggests classifying a computer as damaged if it fails any of the tests. Discuss the advantages and disadvantages of this test plan.
c) What number of tests would a computer have to fail in order to be classified as damaged if the engineers want to have the probability of a Type I error equal to 5%?
d) What's the power of the test plan in part c?
e) A colleague points out that by increasing just 2%, the power can be increased substantially. Explain.