Question

In: Statistics and Probability

Suppose a small company that manufactures cereal bars own two scales that weigh their products (say...

Suppose a small company that manufactures cereal bars own two scales that weigh their products (say A and B). Quality control manager in this company is concerned that scale A is erroneous. He takes a sample of 20 cereal bars and weigh each of them using both scales A and B. Assume that you were given a spread sheet that include weights of the 20 cereal bars reported by two scales.

Explain how you would approach testing the QC managers’ concern. What type of tests/CI you would construct to help him make a decision? Mention of any assumptions you would check or any graphing techniques you would use to display the data.

Solutions

Expert Solution

First of all we have to assume that the weights are normally distributed.

To verify this assumption we have to draw the normal probability plot in which frequency is plotted against normal quantiles. If this shows the linear pattern in the points then we can say that the data follows the normal distribution. If it is normal distribution then go forward.

Here the manufacturer wants to know if the weights on scale A and scale B are equal or not. For this consider the null hypothesis that

Where is the population mean of weights on scale A.    is the population mean of weights on scale B.

Then use t test for independent samples where sample size is 20 and population standard deviation is unknown. Also we can use confidence interval for population mean using pivotal quantity same as the test statistic of t test for independent samples. If the confidence interval contains the value zero ( because null hypothesis is difference between population means of weights is zero) then manufacturer would conclude that scale is not erroneous.


Related Solutions

The company manufactures two products, Big and Small. The company has identified the following      activities,...
The company manufactures two products, Big and Small. The company has identified the following      activities, overhead cost and cost drivers for two different products. Activity Center Activity Driver Costs Machine setup Number of setups $100,000 Special design Design hours $364,000 Production Direct labor hours $900,000 Machining Machine hours $300,000 BIG SMALL Number of Units produced 10,000 35,000 Direct materials cost per unit $75 $40 Direct labor cost per unit $19.50 $13 Number of setups 100 100 Design hours 900...
Roland Company operates a small factory in which it manufactures two products: A and B. Production...
Roland Company operates a small factory in which it manufactures two products: A and B. Production and sales result for last year were as follow: A B Units sold 8,000 16,000 Selling price per unit 65 52 Variable costs per unit 35 30 Fixed costs per unit 15 15 For purposes of simplicity, the firm allocates total fixed costs over the total number of units of A and B produced and sold. The research department has developed a new product...
Equivalent Units of Production Wheatmore Company manufactures cold cereal products, such as Frosted Flakes. Assume that...
Equivalent Units of Production Wheatmore Company manufactures cold cereal products, such as Frosted Flakes. Assume that the inventory in process on March 1 for the Packing Department included 720 pounds of cereal in the packing machine hopper, (enough for 480 24-oz. boxes) and 480 empty 24-oz. boxes held in the package carousel of the packing machine. During March, 39,840 boxes of 24-oz. cereal were packaged. Conversion costs are incurred when a box is filled with cereal. On March 31, the...
Tharp Company operates a small factory in which it manufactures two products: C and D. Production...
Tharp Company operates a small factory in which it manufactures two products: C and D. Production and sales results for last year were as follows. C D Units sold 8,800 19,000 Selling price per unit $93 $75 Variable cost per unit 47 39 Fixed cost per unit 20 20 For purposes of simplicity, the firm averages total fixed costs over the total number of units of C and D produced and sold.    The research department has developed a new product...
Company X operates a small factory in which it manufactures two products: C and D. Production...
Company X operates a small factory in which it manufactures two products: C and D. Production and sales results for last year were as follows: Item C D Units sold 9,000 20,000 Selling price per unit 98 75 Variable cost per unit 50 40 Fixed cost per unit 24 24 For purposes of simplicity, the firm averages total fixed costs over the total number of units produced. The research department has developed a new product (E) as a replacement for...
Tharp Company operates a small factory in which it manufactures two products: C and D. Production...
Tharp Company operates a small factory in which it manufactures two products: C and D. Production and sales results for last year were as follows. C D Units sold 9,000 19,000 Selling price per unit $97 $75 Variable cost per unit 50 39 Fixed cost per unit 20 20 For purposes of simplicity, the firm averages total fixed costs over the total number of units of C and D produced and sold.    The research department has developed a new product...
Tharp Company operates a small factory in which it manufactures two products: C and D. Production...
Tharp Company operates a small factory in which it manufactures two products: C and D. Production and sales results for last year were as follows. C D Units sold 9,100 19,600 Selling price per unit $95 $77 Variable cost per unit 50 41 Fixed cost per unit 22 22 For purposes of simplicity, the firm averages total fixed costs over the total number of units of C and D produced and sold.    The research department has developed a new product...
Tharp Company operates a small factory in which it manufactures two products: C and D. Production...
Tharp Company operates a small factory in which it manufactures two products: C and D. Production and sales results for last year were as follows. C D Units sold 9,200 19,900 Selling price per unit $95 $78 Variable cost per unit 49 42 Fixed cost per unit 25 25 For purposes of simplicity, the firm averages total fixed costs over the total number of units of C and D produced and sold.    The research department has developed a new product...
A cereal company issues coupons that can be exchanged for boxes of cereal. It issues two...
A cereal company issues coupons that can be exchanged for boxes of cereal. It issues two million coupons that promise the retailer who redeems the coupons $1 per coupon. The probability of redemption of any one coupon is 10%. What is the amount of the liability that the company recognizes? a. $2,000 b. $20,000 c. $100,000 d. $200,000 e. $2,000,000
Jonah Hill Company manufactures two products. Information about the two products is as follows: ​ Product...
Jonah Hill Company manufactures two products. Information about the two products is as follows: ​ Product X Product Y Selling price per unit $80 $30 Variable costs per unit 40 20 Contribution margin per unit $40 $10 The company expects fixed costs to be $185,000. The firm expects 70% of its sales (in units) to be Product X and 30% to be Product Y (a sales mix of 7:3). a. Calculate the weighted average contribution margin or contribution margin by...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT