Production Costs (introduced in Chapter 19) A manufacturer produces custom metal blanks that are used by its
Question:
(a) Would it be appropriate for management to compare the two plants using a two-sample comparison of the costs per unit, or would such a comparison be confounded by different requirements for machine use per unit in the two plants?
(b) Perform the two-sample t-test to compare the average cost per unit at the two plants. Summarize this analysis, assuming that there are no lurking variables.
(c) Compare the average cost per unit at the two plants using an analysis of covariance. Summarize the comparison based on this analysis. Represent these categories using a dummy variable coded as 1 if the plant is new. (Assume for the moment that the model meets the conditions for the MRM.)
(d) Compare the results from parts (b) and (c). Do they agree? Explain why they agree or differ. You should take into account the precision of the estimates and your answer to part (a).
(e) Does the estimated multiple regression used in the analysis of covariance meet the similar variances condition?
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Related Book For
Statistics For Business Decision Making And Analysis
ISBN: 9780321890269
2nd Edition
Authors: Robert Stine, Dean Foster
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