Instruction 10-5
a Buyer for a Manufacturing Plant Suspects That

question 140

Short Answer

Instruction 10-5
A buyer for a manufacturing plant suspects that his primary supplier of raw materials is overcharging. In order to determine if his suspicion is correct, he contacts a second supplier and asks for the prices on similar various materials. He wants to compare these prices with those of his primary supplier. The data collected is presented in the table below, with some summary statistics presented (all of these might not be necessary to answer the questions which follow). The buyer believes that the differences are normally distributed and will use this sample to perform an appropriate test at a level of significance of 0.01.
$\begin{array}{llll}\text {Material}&\text {Primary Supplier}&\text {Secondary}&\text {Difference}\\&&\text { Supplier }\\ 1 & \$ 55 & \$ 45 & \$ 10 \\2 & \$ 48 & \$ 47 & \$ 1 \\3 & \$ 31 & \$ 32 & -\$ 1 \\4 & \$ 83 & \$ 77 & \$ 6 \\5 & \$ 37 & \$ 37 & \$ 0 \\6 & \$ 55 & \$ 54 & \$ 1 \\\hline \text { Sum: } & \$ 309 & \$ 292 & \$ 17 \\\text { Sum of Squares: } & \$ 17,573 & \$ 15,472 & \$ 139\end{array}$

-Referring to Instruction 10-5,what is the 95% confidence interval estimate for the mean difference in prices?

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Definitions:

Pension Fund

A pool of funds accumulated to pay employees' retirement benefits, contributed by employers, employees, or both.

Employment Time

The duration or period a person is engaged in work or holds a job.

Organizational Commitment

The psychological attachment and loyalty an employee feels towards their organization, often reflecting in higher motivation and lower turnover.

Organizational Commitment

The psychological attachment and loyalty an employee feels towards their organization, influencing their willingness to contribute to the company's goals.