EXAMPLE 9.6 Expected Counts from Software

CASE 9.1 The expected counts for Case 9.1 appear in the computer outputs shown in Figure 9.1. For example, the expected count for the parallel flexibility and highly competitive cell is 14.75.

How is this expected count obtained? Look at the percents in the right margin of the table in Figure 9.1. We see that 40.98% of all companies are highly competitive. If the null hypothesis of no relation between competitiveness and flexibility is true, we expect this overall percent to apply to all levels of flexibility. For our example, we expect 40.98% of the companies that use parallel flexibility to be highly competitive. There are 36 companies that use parallel flexibility, so the expected count is 40.98% of 36, or 14.75. The other expected counts are calculated in the same way.