Instruction 10-6
a Buyer for a Manufacturing Plant Suspects That

question 141

Multiple Choice

Instruction 10-6
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.
$$\begin{array} { c c c r } \text { Material } & \begin{array} { c } \text { Primary } \\\text { Supplier }\end{array} & \begin{array} { c } \text { Secondary } \\\text { Supplier }\end{array} & \text { Difference } \\\hline 1& \$ 55 & \$ 45 & \$ 10 \\2 & \$ 48 & \$ 47 & \$ 1 \\3 & \$ 31 & \$ 32 & - \$ 1 \\4 & \$ 83 & \$ 77 & \$ 6 \\5 & \$ 37 & \$ 37 & \$ 0 \\6& \$ 55 & \$ 54 & \$ 1 \\\hline \hline \text { Sum: } &\$309&\$292&\$17\\\text { Sum of Squares. } & \$ 17,573 & \$ 15,472 & \$ 139\end{array}$$
-Referring to Instruction 10-6,the test to perform is a

• A)paired t test for the mean difference.
• B)Z test for the difference between two means.
• C)separate-variance t test for differences between two means.
• D)pooled-variance t test for differences between two means.

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Definitions:

Causation

The relationship between cause and effect, where one event (the cause) directly results in another event (the effect).

Economic Activity

Any action that involves the production, distribution, and consumption of goods and services within an economy.

Fallacy of Composition

The erroneous belief or argument that what is true for a part is necessarily true for the whole, or that what holds for individual members of a group must necessarily hold for the group as a whole.

Nearest Exit

The closest point of egress from a building, vehicle, or area, often highlighted as part of safety protocols.