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Competitive prices?
A retailer entered into an exclusive agreement with a supplier who guaranteed to provide all products at competitive prices. The retailer eventually began to purchase supplies from other vendors who offered better prices. The original supplier ?led a legal action claiming violation of the agreement. In defense, the retailer had an audit performed on a random sample of invoices. For each audited invoice, all purchases made from other suppliers were examined and the prices were compared with those offered by the original supplier. For each invoice, the percent of purchases for which the alternate supplier offered a lower price than the original supplier was recorded.35 Here are the data:
0 100 0 100 33 34 100 48 78 100 77 100 38
68 100 79 100 100 100 100 100 100 89 100 100
Report the average of the percents with a 95% margin of error. Do the sample invoices suggest that the original supplier's prices are not competitive on the average?
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