A toy company is concerned that its distribution strategy is

A toy company is concerned that its distribution strategy is not working. Sean Masterson, the marketing manager stated that one of the primary goals in the distribution of a particular toy is to keep the prices similar throughout all their distribution channels. To find out if their strategy is failing, the marketing department took a survey of 5 different outlets in three different channels.

The price results are in the following table: Store Web sales Discount stores Department stores

Store

Web sales

Discount stores

Department stores

1

12

15

19

2

13

17

17

3

14

14

16

4

12

18

20

5

15

17

19

Using ANOVA, determine if there is a significant difference in prices between the three channels. Mr. Masterson wants to be 90% confident, so list all the steps of the hypothesis test and do the calculations then write a memorandum to Mr. Masterson stating your conclusion and backing it up with statistical analysis.

Solution

Sol)

H0: All the treatments are equal

H1: Atleast one treatment are not same

H0: All the blocks are equal

H1: Atleast one block is not same

Alpha:10%

Test Statistic:

we use two way ANOVA

From Excel

Conclusion:

F cal=1.28 (for treatments)

F cal=14.16 (for blocks)

P>0.1 we accept H0(for treatments)

P<0.1 we reject the null hypothesis