Use the Runs Test to Determine Whether the Given Sequence

question 21

Essay

Use the runs test to determine whether the given sequence is random. Use a significance level_
of 0.05. The sequence of numbers below represents the maximum temperature (in degrees
Fahrenheit)in July in one U.S. town for 30 consecutive years. Test the sequence for
randomness above and below the median. $$\begin{array} { r r r r r r c c c c } 94 & 96 & 97 & 99 & 95 & 90 & 97 & 98 & 100 & 100 \\92 & 95 & 98 & 99 & 102 & 97 & 97 & 101 & 99 & 100 \\98 & 95 & 93 & 99 & 101 & 99 & 101 & 100 & 99 & 103\end{array}$$

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Definitions:

ABC System

A system of controlling inventory that recognizes the differing cost and importance of various items. A parts are expensive and/or important and are controlled carefully. C parts are cheap and plentiful, so little effort is expended to monitor them. B parts are between As and Cs.

Inventory Management

The oversight of non-capitalized assets (inventory) and stock items, involving the control of ordering, storing, and using a company's inventory.

Accessible

Refers to something that can be easily approached, entered, or used; in financial terms, it may refer to assets or funds that can be readily tapped or utilized.

Commercial Paper

Corporations issue this unsecured, short-term financial instrument to cover expenses related to payroll, accounts payable, and inventories.