A corporate analyst is testing whether mean inventory turnover has increased. Inventory turnover in six randomly chosen product distribution centers (PDCs) is shown. $\begin{array} { |l | c | c | }
\hline & { \text { This Year } } & \text { Last Year } \
\hline \text { PDC 1 } & 5.1 & 4.1 \
\hline \text { PDC 2 } & 3.9 & 2.9 \
\hline \text { PDC 3 } & 4.8 & 2.8 \
\hline \text { PDC 4 } & 3.4 & 3.4 \
\hline \text { PDC 5 } & 4.6 & 2.6 \
\hline \text { PDC 6 } & 7.7 & 4.7 \
\hline
\end{array}$ The right-tailed critical value at ? = 0.005 is:
A)1.645
B)1.479
C)4.032
D)2.015

Question

A corporate analyst is testing whether mean inventory turnover has increased. Inventory turnover in six randomly chosen product distribution centers (PDCs) is shown. $\begin{array} {  |l | c | c | } 
\hline & { \text { This Year } } & \text { Last Year } \
\hline  \text { PDC 1 } & 5.1 & 4.1 \
\hline  \text { PDC 2 } & 3.9 & 2.9 \
\hline  \text { PDC 3 } & 4.8 & 2.8 \
\hline \text { PDC 4 } & 3.4 & 3.4 \
\hline  \text { PDC 5 } & 4.6 & 2.6 \
\hline  \text { PDC 6 } & 7.7 & 4.7 \
\hline
\end{array}$ The right-tailed critical value at ? = 0.005 is:
A)1.645
B)1.479
C)4.032
D)2.015

Quizplus · Accepted Answer

The right-tailed critical value at α = 0.005 for a t-test (which is appropriate here due to the small sample size and the test involving means) is typically found in t-distribution tables or through statistical software. Given the very low alpha level (0.005), indicating a very stringent criterion for rejecting the null hypothesis, the critical value is expected to be high. Choice C, 4.032, is the only value that is reasonably high for such a low alpha level in the context of a t-test, where degrees of freedom would be small (in this case, n-1 = 5) and critical values are higher than for a normal distribution (which would use 1.645 for α = 0.05, not 0.005).

A Corporate Analyst Is Testing Whether Mean Inventory Turnover Has