“Offshoring” is a term that describes a company’s practice of relocating jobs and/or production to another country to reduce labor costs. The Journal of Applied Business Research (January/February 2011) published a study on the phenomenon of offshoring and how prevalent it is worldwide. The article included the results from a recent survey of CEOs at US firms, where each CEO was asked about his or her firm’s position on offshoring. A summary of the results (similar to the actual study) is shown in the accompanying table.

a. Identify the qualitative variable of interest (and its levels) for this study.

b. Are the proportions of US firms in the four offshoring position categories significantly different? Conduct the appropriate chi-square test using α = .05.

c. Construct a 95% confidence interval for the proportion of US firms who are currently offshoring. Interpret the result.

Transcribed Image Text:

Firm's Position Currently offshoring Not currently offshoring, but plan to do so in the future Offshored in the past, but no more Offshoring not applicable Total Number of Firms 126 72 30 372 600