2. A firm is considering the delivery times of two raw material suppliers, A and

Question

2. A firm is considering the delivery times of two raw material suppliers, A and B. The firm is basically satisfied with supplier A; however, if the firm finds the mean delivery time of supplier B is less than the mean delivery time of supplier A, the firm will begin purchasing raw materials from suppler B (meaning, switch from supplier A to supplier B). Independent samples (assume equal population variances) show the following sample data for the delivery times of the two suppliers SUPPLIER SUMMARY DATA Sample Mean Sample Standard Deviation Sample Size 14 days 3 days 50 12.5 days 2 days 30 a. State the null and alternative hypotheses for this situation b. If = 0.05, what is the critical value of the associated test statistic? c. What is the calculated value of the associated test statistic? d. State your decision about the null hypothesis by comparing the critical and calculated values of the test statistic (Parts b and c) e. What action do you recommend in terms of supplier selection?

Explanation / Answer

to testing hypothesis that

Ho: Means for A and B are same ie (Ma=Mb)

Vs

H1: Means For A is greater than for Mean of B

ie (Mb<Ma)
————— 03/11/2017 01:56:11 AM ————————————————————

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MTB > TwoT 50 14 3 30 12.5 2;
SUBC> Pooled;
SUBC> Alternative 1.

Two-Sample T-Test and CI

Sample N Mean StDev SE Mean
1 50 14.00 3.00 0.42
2 30 12.50 2.00 0.37

Difference = mu (1) - mu (2)
Estimate for difference: 1.500
95% lower bound for difference: 0.473
T-Test of difference = 0 (vs >): T-Value = 2.43 P-Value = 0.009 DF = 78
Both use Pooled StDev = 2.6723

MTB > but at level of significance 0.05 it is shows that T-value will more than 0.05(l.o.s)

hence Reject the Null Hypothesis that means of supplier A and supplier B are same

Accept H1 M

Conclusion: Mean of supplier B is Less than mean of Supplier A

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