Cindy Ho,VP of Finance at Discrete Components,Inc.(DCI),theorizes that the discount level offered to credit customers affects the average collection period on credit sales. Accordingly,she has designed an experiment to test her theory using four sales discount rates (0%,2%,4%,and 6%). Cindy wants to control for the size of the customer but not to test for it as the main variable of interest so she classified DCI's credit customers into three categories by total assets (small,medium,and large). Then,she randomly assigned four customers from each category to a sales discount rate. Cindy's experimental design is a ________.
A) normalized block design
B) completely randomized design
C) factorial design
D) random block design
E) partially randomized design

Question

Quizplus · Accepted Answer

Cindy's experimental design is a random block design because she has grouped the customers into three categories (small, medium, and large) and randomly assigned each customer within those categories to one of the four sales discount rates. This allows her to control for the size of the customer while testing the effect of the sales discount rate on the average collection period.