A Mail-Order Business Prides Itself in Its Ability to Fill

question 153

Multiple Choice

A mail-order business prides itself in its ability to fill customers' orders in six calendar days or less on the average. Periodically, the operations manager selects a random sample of customer orders and determines the number of days required to fill the orders. Based on this sample information, he decides if the desired standard is not being met. He will assume that the average number of days to fill customers' orders is six or less unless the data suggest strongly otherwise. On one occasion where a sample of 40 customers was selected, the average number of days was 6.65, with a sample standard deviation of 1.5 days. Can the operations manager conclude that his mail-order business is achieving its goal? Use a significance level of 0.025 to answer this question.

• A) Since 2.2216 < 2.4511, reject H0 and conclude that the mail-order business is not achieving its goal
• B) Since 2.7406 > 2.023, reject H0 and conclude that the mail-order business is not achieving its goal.
• C) Since 2.4421 > 2.023, reject H0 and conclude that the mail-order business is not achieving its goal.
• D) Since 2.2346 < 2.5113, reject H0 and conclude that the mail-order business is not achieving its goal.

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Definitions:

Specifications

Detailed descriptions of the design, materials, and performance criteria that a product, service, or project must meet.

Disqualifying Suppliers

The process of removing vendors from consideration for contracts due to failure to meet specified criteria or standards.

Competitive Advantage

An attribute or set of attributes that allows an organization to outperform its competitors.

Operational Efficiency

The ability of an organization to minimize input and expenditure while maximizing output, thereby optimizing performance.