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A telephone sales company with 200 sales staff uses a five-level grading system for annual performance. End-of-year bonus payments for sales staff are determined on their individual performance grading. Staff rated Grade 1 receive only the minimum bonus payment while staff rated Grade 5 receive the highest bonus payment. The company has an expected distribution of performance grades which it uses to budget for bonus payments. However the company’s financial director is concerned that the actual distribution of performance grades differs significantly from the expected distribution with proportionally fewer sales staff getting the lower grades and proportionally more getting higher than expected grades. Based on the latest performance grades, is the financial director right to be concerned? Use a 5% significance level.
, we thus reject the null hypothesis and conclude that the actual distribution of performance grade differs from the expected distribution at 5% significance level and as such the financial director is right to be concerned.
A packaging device is set to fill detergent packets with a mean weight of 500g. It is important to check the machine periodically because overfilling increases the cost of materials whereas underfilling leaves the firm liable to prosecution. A random sample of 25 filled packets is weighed and shows a mean net weight of 510g with a standard deviation of 15g. What conclusion can be drawn at the 5% level of ...Download file to see next pagesRead More