Chapter 10.2, Problem 10.10ACB

Offshoring companies. “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 U.S. 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.

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

1. a. Identify the qualitative variable of interest (and its levels) for this study.
2. b. Are the proportions of U.S. firms in the four offshoring position categories significantly different? Conduct the appropriate chi-square test using α = .05.
3. c. Construct a 95% confidence interval for the proportion of U.S. firms who are currently offshoring. Interpret the result.