The experiment data in below table was to evaluate the effects of three variable
ID: 457814 • Letter: T
Question
The experiment data in below table was to evaluate the effects of three variables on invoice errors for a company. Invoice errors had been a major contributor to lengthening the time that customers took to pay their invoices and increasing the accounts receivables for a major chemical company. It was conjectured that the errors might be due to the size of the customer (larger customers have more complex orders), the customer location (foreign orders are more complicated), and the type of product. A subset of the data is summarized in the following Table.
Table: Invoice Experiment Error
Customer Size
Customer Location
Product Type
Number of Errors
-
-
-
15
+
-
-
18
-
+
-
6
+
+
-
2
-
-
+
19
+
-
+
23
-
+
+
16
+
+
+
21
Customer Size: Small (-), Large (+)
Customer Location: Foreign (-), Domestic (+)
Product Type: Commodity (-), Specialty (=)
Reference: Moen, Nolan, and Provost (R. D. Moen, T. W. Nolan and L. P. Provost. Improving Quality through Planned Experimentation. New York: McGraw-Hill, 1991)
Use the date in table above and answer the following questions in the space provided below:
1. What is the nature of the effects of the factors studied in this experiment?
2. What strategy would you use to reduce invoice errors, given the results of this experiment?
Customer Size
Customer Location
Product Type
Number of Errors
-
-
-
15
+
-
-
18
-
+
-
6
+
+
-
2
-
-
+
19
+
-
+
23
-
+
+
16
+
+
+
21
Explanation / Answer
We allocate a value of 0 for small customer size & 1 for large customer size. Llikewise we
allocate 0 for foreign customer and 1 for Domestic customer and 0 for commodity and 1
for specialty.
Customer Size
Customer Location
Product Type
Number of Errors
0
0
0
15
1
0
0
18
0
1
0
6
1
1
0
2
0
0
1
19
1
0
1
23
0
1
1
16
1
1
1
21
From the regression analysis we see that Coefficient S = 0
Standard Error
T Stat
P Value
Lower 95 %
Upper 95 %
N/A
N/A
N/A
N/A
N/A
0
2.024
0.1129
-3.156
20.156
8.5
6
1
12.656
5
4.198
0.2381
0.8234
5
10.656
0
4
2
4.343
5
-1
3.811
0.01892
27.656
4.198
9
2
5
0
16
4.198
Uppermost correlation coefficient is 16 & is for specialty product type. This indicates that the
specialty products give the maximum to the no of errors in the invoice.
The 2nd factor is the customer size. It has a coefficient of 8.5 which way that the
no of error enlarge as the customer size goes large.
The Customer location is observed to have least impact on the invoice errors and the
coefficient is -1 which states that foreign customer has superior invoice errors than
domestic customers.
2) The highest provider to the invoice error is the specialty product and therefore we will try
to decrease the errors in specialty product to a least amount and try to find out the motive
after the invoice errors in specialty product. We may as well want to focus on commodity
products and deliver less of specialty product as there are so countless errors in specialty
products.
Customer Size
Customer Location
Product Type
Number of Errors
0
0
0
15
1
0
0
18
0
1
0
6
1
1
0
2
0
0
1
19
1
0
1
23
0
1
1
16
1
1
1
21
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.