Glenda Good and Danny Rock Are Department Managers in the Housewares

question 173

Essay

Glenda Good and Danny Rock are department managers in the housewares and shoe departments, respectively, for Litwins, a large department store. Danny has observed Glenda taking inventory from her own department home, apparently without paying for it. He hesitates confronting Glenda because he is due to be promoted, and needs Glenda's recommendation. He also does not want to notify the company management directly, because he doesn't want an ethics investigation on his record, believing that it will give him a "goody-goody" image. This week, Glenda tried on several pairs of expensive running shoes in his department before finding a pair that suited her. She did not, however, buy them. That very pair was missing this morning.
Litwins recently replaced its old periodic inventory system with a perpetual inventory system using scanners and bar codes. In addition, the annual inventory is to be replaced by a monthly inventory conducted by an independent firm. On hearing the news of the changes, Danny relaxes. "The system will catch Glenda now," he says to himself.
Required:
1. Is Danny's attitude justified? Why or why not?
2. What, if any, action should Danny take now?

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Definitions:

Inferential Statistics

A branch of statistics focused on drawing conclusions and making predictions about a population based on a sample.

Inferential Parameters

Parameters derived from sample data for the purpose of making inferences about the larger population.

Sampling Distribution

The probability distribution of a statistic based on a random sample.

Statistical Inferences

The process of drawing conclusions about population parameters based on a sample.