A Manufacturer Wants to Increase the Shelf Life of a Line

question 114

Short Answer

A manufacturer wants to increase the shelf life of a line of cake mixes. Past records indicate that the average shelf life of the mix is 216 days. After a revised mix has been developed, a sample of nine boxes of cake mix had a mean of 217.222 and a standard deviation of 1.2019. At the 0.025 significance level, decide if the sample data support the claim that shelf life has increased. State your decision in terms of the null hypothesis.

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Definitions:

Fixed Assets

Physical assets with a useful life greater than one year, which are used in the operations of a business, such as machinery or buildings.

Net Cash Flow

The difference between the cash inflows and cash outflows in a business over a specified period.

Depreciation Expense

A non-cash expense recorded on the income statement, reflecting the gradual reduction of an asset's value over its useful life.

Net Loss

When expenses total more than revenue, the result is net loss.