Question

Item	WinCo Foods	Walmart
Bananas (lb)	$0.42	$0.48
Red Onions (lb)	$0.58	$0.98
Mini Peeled Carrots (1 lb bag)	$0.98	$1.48
Roma Tomatoes (lb)	$0.98	$2.67
Deli Tater Wedges (lb)	$1.18	$1.78
Beef Cube Steak (lb)	$3.83	$4.11
Beef Top Round London Broil (lb)	$3.48	$4.12
Pillsbury Devils Food Cake Mix (18.25 oz)	$0.88	$0.88
Lipton Rice and Sauce Mix (5.6 oz)	$0.88	$1.06
Sierra Nevada Pale Ale (12 - 12 oz bottles)	$12.68	$11.84
GM Cheerios Oat Clusters (11.3 oz)	$1.98	$2.74
Charmin Bathroom Tissue (12 roll)	$5.98	$5.48
Bumble Bee Pink Salmon (14.75 oz)	$1.58	$1.98
Pace Thick & Chunky Salsa, Mild (24 oz)	$2.28	$2.78
Nalley Chili, Regular w/Beans (15 oz)	$0.78	$0.78
Challenge Butter (lb quarters)	$2.18	$2.58
Kraft American Singles (12 oz)	$2.27	$2.27
Yuban Coffee FAC (36 oz)	$5.98	$7.56
Totino's Pizza Rolls, Pepperoni (19.8 oz)	$2.38	$2.42
Rosarita Refried Beans, Original (16 oz)	$0.68	$0.73
Barilla Spaghetti (16 oz)	$0.78	$1.23
Sun-Maid Mini Raisins (14 - 0.5 oz)	$1.18	$1.36
Jif Peanut Butter, Creamy (28 oz)	$2.54	$1.92
Dole Fruit Bowl, Mixed Fruit (4 - 4 oz)	$1.68	$1.98
Progresso Chicken Noodle Soup (19 oz)	$1.28	$1.38
Precious Mozerralla Ball, Part Skim (16 oz)	$3.28	$4.23
Mrs. Cubbison Seasoned Croutons (6 oz)	$0.88	$1.12
Kellog's Raisin Bran (20 oz)	$1.98	$1.68
Campbell's Soup at Hand, Cream of Tomato (10.75 oz)	$1.18	$1.26

WinCo Foods, a large discount grocery retailer in the Western United States, promotes itself as the lowest priced grocery retailer. In newspaper ads WinCo Foods published a price comparison for products between WinCo and several competing grocery retailers. One of the retailers compared against WinCo was Walmart, also known as a low price competitor. WinCo selected a variety of products, listed the price of the product charges at each retailer, and showed the sales receipt to prove the prices at WinCo were the lowest in the area. A sample of the products and their price comparison at both WinCo and Walmart are shown on the left. Do the prices listed indicate that, on average, prices at WinCo are lower than prices at Walmart? Use 5% significance level.

Solve this question using Excel. State the null & alternative hypotheses clearly. Interpret the Excel output and state your conclusion clearly. Provide all your results and comments on this sheet. Specifically, type in your answers in the spaces provided below:

Are the samples related (i.e. dependent) or independent?

Null Hypothesis:

Alternative Hypothesis:

Interpretation of Excel output (Conclusion of Hypothesis test):

Business Implications:

Answer 1

Are the samples related (i.e. dependent) or independent?

The samples must be independent because the companies are pricing independently. i

Null Hypothesis: prices at WinCo and  Walmart are the same

Alternative Hypothesis: True average  prices at WinCo are lower than prices at Walmart

Assuming normality we perform a independent sample t test considering equal variance.

Interpretation of Excel output (Conclusion of Hypothesis test): Thus we get the one sided p value based on the t test as .3303, which is more than .05 and hence we fail to reject the null at 5%.

Business Implications: True average  prices at WinCo are not significantly different from prices at Walmart. Thus the claim made by WinCo that the prices at WinCo were the lowest in the area is not supported by the data.