A Certain Manufacturer Is Interested in Evaluating Two Alternative Manufacturing

question 79

Multiple Choice

A certain manufacturer is interested in evaluating two alternative manufacturing plans consisting of different machine layouts. Because of union rules, hours of operation vary greatly for this particular manufacturer from one day to the next. Twenty-eight random working days were selected and each plan was monitored and the number of items produced each day was recorded. Some of the collected data is shown below: $$\begin{array} { c | c | c } \text { DAY } & \text { PLAN 1 OUTPUT } & \text { PLAN 2 OUTPUT } \\\hline 1 & 1234 \text { units } & 1311 \text { units } \\2 & 1355 \text { units } & 1366 \text { units } \\3 & 1300 \text { units } & 1289 \text { units }\end{array}$$ What assumptions are necessary for the above test to be valid?

• A) The population of paired differences must be approximately normally distributed.
• B) The population variances must be approximately equal.
• C) Both populations must be approximately normally distributed.
• D) None of these listed, since the Central Limit Theorem can be applied.

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Definitions:

Contract Interest Rate

The rate of interest stated in a loan or credit agreement that must be paid on the principal by the borrower.

Bond Discount

The variance in price between the face value of a bond and the amount it fetches on the market, specifically when sold at a price less than the face value.

Straight-Line Method

A method of calculating depreciation by evenly spreading the cost of an asset over its useful life.

Semiannual Interest

Refers to the payment of interest on a loan or financial instrument every six months.