Successful management, business and finance homework help
Discussion Topic
In
this Discussion, you will examine practical applications of hypothesis
testing. Make sure to read the chapter on Hypothesis testing before
posting.
Successful
management is about making decisions to bring about desired change. A
manager who has a specific objective will execute an action, hoping that
the result will be the achievement of that objective. However, due to
the multitude of factors that are in play in any real-life situation, it
is difficult to tell if the desired outcome has been achieved or if the
new numbers are only due to randomness.
For
example, a sales manager implements a bonus system and sees the sales
figures go up by 3% in the next month. She claims success, but was this
really due to the bonus system or could the increase be the result of
random fluctuations, something that would have happened anyway? Can the
manager confidently claim that there has been a significant change,
something that could not be the result of random fluctuations?
Another
example may be where HR is worried there may be a difference between
the salaries of men versus women that may need to be corrected. Is the
difference between average salaries of the two genders significant, or
could it be due to coincidence? Can someone claim there is
discrimination at work?
Hypothesis
testing answers such questions and is key to managing intelligently.
Without these answers, you cannot be sure if the actions you are taking
are working out or whether things really are the way you think they are.
If you do not know these, how can you know what to do?
For
this Discussion, describe a situation from your work experience where
decisions are being made that would benefit from hypothesis testing.
Follow the template below and answer all questions:
- Describe the decision situation: What
is the desired outcome or the question that needs to be answered, and
what are the actions being considered? Without hypothesis testing, how
are decisions being made currently? - How would you set up the hypothesis test? State what the null and alternative hypothesis would be, what kind of a test you would use.
- Describe the data you would use:
What do you need, how much do you need, where would it come from? Is
all the data currently being recorded or will it need to be collected?
If it needs to be collected, will it need to be sampled (why), or can
the entire data be recorded? Please make sure to answer all these
questions in your explanation. - How would you explain to management the significance of this test? How
would you convince them that using this is necessary? What would be
drawback of not using a hypothesis test in this situation?
Student 1 Reply:
1.Describe the decision situation: What
is the desired outcome or the
question that needs to be answered, and what are the actions being
considered? Without hypothesis testing, how are decisions being made
currently?
The
Mosaic Life Care Distribution department receives lip balm for patient
use by cases of 300 each. It is
simply too difficult to issue lip balm by the 1 each unit of measure to
the departments requesting it. Also, issuing an entire case of 300 each
to the requesting departments is just too much. Most of the nursing
floors wouldn’t go through that much lip balm
in a 6 month period. As a solution, Mosaic Distribution caregivers are
now required to break down each case of lip balm into small bags of 25
each prior to the lip balm reaching the storeroom shelf. There have been
several calls made into the department that
the bags of lip balm do not have 25 each in them. In this situation,
the question that needs to be answered is as follows – Is the packaging
process of lip balm out of control as determined by the amount of lip
balm in each bag?
2.How would you set up the hypothesis test? State what the null and alternative
hypothesis would be, what kind of a test you would use.
Null Hypothesis – The average amount of lip balm in each smaller bag is 25 each.
Alternative Hypothesis – The average amount of lip balm in each smaller bag is not 25 each.
The
best way to test this hypothesis is to perform a physical count on each
of the smaller lip balm bags. The
physical counts can be done for all of the bags that currently remain
on the storeroom shelf and those that remain in supply bins that were
recently ordered and waiting to be taken to the requesting locations. It
would be best to have an initial count performed,
and then a second count performed by another caregiver to verify the
total.
3.Describe the data you would use:
What do you need, how much do you
need, where would it come from? Is all the data currently being
recorded or will it need to be collected? If it needs to be collected,
will it need to be sampled (why), or can the entire data be recorded?
Please make sure to answer all these questions in your
explanation.
There
are over 200 hospital and clinic locations that request and order
patient lip balm from the storeroom.
It is not reasonable or even possible to perform a count at each of the
200 + locations. A count would need to be performed on the bags that
currently reside on the storeroom shelf first. If there are orders
waiting to be delivered that include lip balm, they
need to be counted as well. Regarding the supply closets on the nursing
floors, the bags can only be counted and used for data if they are
still sealed shut. Any open bags would be void and the data could not be
used.
Since
the necessary data is currently not being recorded, going forward each
time a case of lip balm (300 ea.)
is received on the receiving dock and broken down into smaller bags (25
ea.), a second count and verification can be performed before the lip
balm even hits the shelf. This would eliminate any room for error and
inconsistency. When errors or inconsistencies
are found, they will be documented and recorded.
I will need to take samples to use for my data. As previously discussed, physical counts will need to be performed and the
necessary data will be obtained in this fashion.
4.How would you explain to management the significance of this test? How
would you convince them that using this is necessary? What would be drawback of not using a hypothesis test in this situation?
This
test is significant because our customers (every supply closet, nursing
floor, clinic, etc.) have an annual budget that they are guided by. If
they have a
charge that hits their cost center for 25 lip balm, and they are
receiving less than that, they are being shorted. Alternatively, if the
bags contain more than 25 each, it hurts the Distribution cost center
since they will be swallowing the additional cost.
It
is possible that the vendor may be miss-filling the lip balm as well.
While the case says that it contains 300 each, it may contain 298 or
303. Either way,
the customer should get exactly what they are paying for. This scenario
only relates to lip balm, but with other items that follow the same
practice, the cost savings or expenditure could be quite substantial and
have a greater impact.
Not
using a hypothesis test in this situation will result in continuous
customer frustration and complaints. Customer dissatisfaction could
result in low feedback
and survey scores which ultimately determines and weighs in on the
annual bonus payout for the Distribution department.
Student 2 Reply:
Hello Class and Professor,
1.Describe the decision situation:
Working for a major organization, many things come to mind that I
could describe but I have decided to discuss how our coding managers
distribute books. Each year, we are given updated coding manuals to
better do our jobs. Each and every book has to be signed
for. Each year the same thing happens, someone ends up without a book.
All are accounted for on the invoice from the book store but compliance
seems to think that people are taking more than one. Maybe they want to
have one for home as well, or maybe they
are giving them away to someone that they know, that can’t afford them.
2.How would you set up the hypothesis test?
The null hypothesis would be compliance thinking that the books are
being stolen. If they would set up a designated time to hand out books
and have a live body there to account for all the books and signatures,
this problem could be avoided. Their thought
is we are all grown and know that we only take one book so why should
they baby sit. They have a point but sometimes, grown individuals just
can’t be honest. If compliance would start distributing the books this
way, they will eliminate this issue.
3.I would explain that using this method of distribution will not
only eliminate the theft of books but ensure that each book is signed
for and accounted for when they are picked up by the employee. Then no
one can say they didn’t get one and each person
will have the tools necessary to perform job duties.
Thank you,
