The Gordon Beverage Company Bottles Soft Drinks Using an Automatic

question 139

Essay

The Gordon Beverage Company bottles soft drinks using an automatic filling machine. When the process is running properly, the mean fill is 12 ounces per can. The machine has a known standard deviation of 0.20 ounces. Each day, the company selects a random sample of 36 cans and measures the volume in each can. They then test to determine whether the filling process is working properly. The test is conducted using a 0.05 significance level. Using the test statistic approach, what conclusion should the company reach if the sample mean is 12.02 ounces? What type of statistical error may have been committed?

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Definitions:

Efficient Allocation

The optimal distribution of resources among competing uses to maximize output or welfare.

Ppf (Production Possibility Frontier)

A curve depicting all maximum output possibilities for two goods, given a set of inputs and technology, when resources are fully and efficiently utilized.

Efficiently

Achieving maximum productivity with minimum wasted effort or expense.

Production Inefficiency

A situation where resources are not utilized in the best possible manner, resulting in wasted potential output.