One of the biggest issues facing e-retailers is the ability to reduce the proportion of customers who cancel their transactions after they have selected their products. It has been estimated that about half of prospective customers cancel their transactio

Question 9.57
One of the biggest issues facing e-retailers is the ability
to reduce the proportion of customers who cancel their
transactions after they have selected their products. It has
been estimated that about half of prospective customers cancel
their transactions after they have selected their products
(data extracted from B, Tedeschi, HE-Commerce, a Cure for
Abandoned Shopping Carts: A Web Checkout System That
Eliminates the Need for Multiple Screens,” The New York
Times, February 14,2005, p, C3). Suppose that a company
changed its Web site so that customers could use a singlepage
checkout process rather than multiple pages. A sample
of 500 customers who had selected their products were provided
with the new checkout system. Of these 500 customers,
210 cancelled their transactions after they had
selected their products.
a. At the 0.01 level of significance, is there evidence that
the population proportion of customers who select products
and then cancel their transaction is less than 0.50
with the new system?
b. Suppose that a sample of /1 = 100 customers (instead of
n = 500 customers) were provided with the new checkout
system and that 42 of those customers cancelled their transactions
after they had selected their products. At the 0.01
level of significance, is there evidence that the population
proportion of customers who select products and then cancel
their transaction is less than 0.50 with the new system?
c. Compare the results of (a) and (b) and discuss the effect
that sample size has on the outcome, and, in general, in
hypothesis testing.