Question

In an effort to receive faster payment of invoices, a company introduces two discount plans

1. One set of customers is given a 2% discount if they pay their invoice early
2. Another set is offered a 1% discount
3. A third set is not offered any incentive

Using ANOVA, what is the following:

SSG:

df_groups:

SSE:

df_error:

f_critical:

f_value:

can we say that the offers result in faster payments

1. 2% Disc	1% Disc	No Disc
   10	10	29
   5	11	22
   9	12	23
   7	11	15
   6	14	18

Answer 1

SSbetween​​ = SStotal​ - SSwithingroups​ = 655.733 - 139.6 = 516.133

Based on the information provided, the significance level is α=0.05, and the degrees of freedom are df1​ = 2 and df2 ​= 12, therefore, critical F-value = 3.885

Based on calculations done above following are answeres for each part:

SSG: SSbetween = 516.133

dfgroups: dfbetween = 2

SSE = SSwithin = 139.6

dferror: dfwithin ​= 12

fcritical: 3.885

fvalue: 22.183

Since fvalue > fcritical, we reject null hypothesis

At 0.05 significance level, there is sufficient evidence to claim that offers result in faster payments.