Improving Efficiency a Distribution Company Considers Hiring a National Training

question 52

Essay

Improving Efficiency A distribution company considers hiring a national training consultant in hopes of improving efficiency in deliveries. The national consultant agrees to work with 30 drivers for one week as part of a trial before the manufacturing company makes a decision about the training program. The training program will be implemented if the average completed number of deliveries increases by more than 12 deliveries per day per driver. The distribution company manager will test a hypothesis using a = 0.02.
a. Write appropriate hypotheses (in words and in symbols).
b. In this context, which do you consider to be more serious - a Type I or a Type II error?
Explain briefly.
c. After this trial produced inconclusive results the manager decided to test the training
program again with another group of drivers. Describe two changes he could make in the trial to increase the power of the test, and explain the disadvantages of each.

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Definitions:

Account Payable

Liabilities of a business that are owed to creditors for goods or services purchased on credit.

Total Assets

The sum of all assets owned by a company, including both current and non-current assets.

Accounting Systems

A structured process of collecting, recording, summarizing, and reporting financial transactions for a business or organization.

Common Shares

Equity securities representing ownership interests in a corporation, entitling holders to dividends and certain rights under corporate governance.