A Truck Company Wants On-Time Delivery for 98% of the Parts

question 206

Multiple Choice

A truck company wants on-time delivery for 98% of the parts they order from a metal Manufacturing plant. They have been ordering from Hudson Manufacturing but will switch to a New, cheaper manufacturer (Steel-R-Us) unless there is evidence that this new manufacturer Cannot meet the 98% on-time goal. As a test the truck company purchases a random sample of Metal parts from Steel-R-Us, and then determines if these parts were delivered on-time. Which Hypothesis should they test?

• A) \(\mathrm { H } _ { 0 } : p = 0.98\)
• \(\mathrm { H } _ { \mathrm { A } } : p < 0.98\)
• B) \(\mathrm { H } _ { 0 } : p < 0.98\)
• \(\mathrm { H } _ { \mathrm { A } } : p > 0.98\)
• C) \(\mathrm { H } _ { 0 } : p = 0.98\)
• \(\mathrm { H } _ { \mathrm { A } } : p \neq 0.98\)
• D) \(\mathrm { H } _ { 0 } : p = 0.98\)
• \(\mathrm { H } _ { \mathrm { A } } : p > 0.98\)
• E) \(\mathrm { H } _ { 0 } : p > 0.98\)
• \(\mathrm { H } _ { \mathrm { A } } : p = 0.98\)

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Definitions:

Decreases in Current Assets

Reductions in the assets that a company expects to convert into cash, sell, or consume within one year or the operating cycle, whichever is longer.

Indirect Method

A way of preparing the cash flow statement where net income is adjusted for non-cash transactions and changes in working capital to find net cash provided by operating activities.

Net Cash Flows

The difference between a company's cash inflows and outflows within a specific period.

Decrease in Accounts Receivable

A reduction in the amount of money owed to a business by its customers for goods or services delivered on credit.