TABLE 10-8
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 various identical 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.

-Referring to Table 10-8, the buyer should decide that the primary supplier is
A) overcharging because there is strong evidence that this is the case.
B) overcharging because there is insufficient evidence to prove otherwise.
C) not overcharging because there is insufficient evidence to prove otherwise.
D) not overcharging because there is strong evidence to prove otherwise.

Question

TABLE 10-8
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 various identical 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.
 
-Referring to Table 10-8, the buyer should decide that the primary supplier is
A) overcharging because there is strong evidence that this is the case. 
B) overcharging because there is insufficient evidence to prove otherwise. 
C) not overcharging because there is insufficient evidence to prove otherwise. 
D) not overcharging because there is strong evidence to prove otherwise.

Quizplus · Accepted Answer

Based on the summary statistics and results of the two-sample t-test (assuming equal variances), there is insufficient evidence to reject the null hypothesis that there is no difference in the mean prices between the primary supplier and the second supplier. Therefore, the buyer should not conclude that the primary supplier is overcharging.

TABLE 10-8 A Buyer for a Manufacturing Plant Suspects That His Primary