An advertising company is interested in determining if there is a difference in the mean sales that will be generated for a soft drink company based on which shelf the soft drinks are located.There are four possible shelf levels.The ad company wants to control for store size.The following data reflect the sales for one week at each combination of shelf level and store size. Based on the experimental design,the managers should conclude that they were justified in blocking on store size if they test using a 0.05 level of significance.

Question

An advertising company is interested in determining if there is a difference in the mean sales that will be generated for a soft drink company based on which shelf the soft drinks are located.There are four possible shelf levels.The ad company wants to control for store size.The following data reflect the sales for one week at each combination of shelf level and store size.  Based on the experimental design,the managers should conclude that they were justified in blocking on store size if they test using a 0.05 level of significance.

Quizplus · Accepted Answer

Blocking on store size helps to control for potential confounding variables and increase the precision of the estimates. By doing so, the managers can be more confident in their conclusions regarding the effect of shelf location on sales. A level of significance of 0.05 suggests that the managers are willing to accept a 5% chance of making a Type I error (false positive), which is a commonly used threshold in statistical analysis.

An Advertising Company Is Interested in Determining If There Is