EXAMPLE 16.8 Loss of Product Value: Normal Approximation

For observations, we saw in Example 16.7 that . The standard deviation of under the null hypothesis is

The continuity correction calculates the -value as , treating the value as occupying the interval from 33.5 to 34.5. We find the Normal approximation for the -value by standardizing and using the standard Normal table:

Despite the small sample size, the Normal approximation gives a result quite close to the exact value . The Minitab output in Figure 16.6(b) gives based on a Normal calculation rather than the table.