Shop-Rite has different departments (e.g. front end, bakery, grocery etc...) and

Question

Shop-Rite has different departments (e.g. front end, bakery, grocery etc...) and pays its part-time employees different hourly wages. While different departments need certain skills, Shop-Rite wants some consistency with respect to the hourly wage employees make in the various departments. A sample is taken from each department and currently departments pay the following hourly wages: $12, $20, $16, $18, and $19. Human Resources have determined that if the variability of hourly wages is greater than 20%, Shop-Rite will need to readjust its hourly wages. Will the hourly wages be adjusted? Prove statistically.

Explanation / Answer

The coefficient of variation is a measure of spread that describes the amount of variability relative to the mean.

The coefficient of variation=standard deviation/ mean= 3.16/17 =0.1860. Here, the variability of hourly wages is 18.60%. Hence, Shop_Rite does not need to readjust its hourly wages.

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.