What is the nature of the effects of the factors studied in this experiment?

/in /by

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 ATTACHED TABLE

 

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Use the data in table attached 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?
    StrayerLogoHoriz_RGB MAT 510 – Homework Assignment

     

     

     

    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?

     

     

     

     

    Regression Model

    Y=30 + 1×1 – 3.75×2 +4.75 x3 – 0.75x1x2 + 1.25 x1x3 + 2.5x2x3 + 1x1x2x3

     

    Customer size has small effect on invoice errors. Product types has the biggest effect on invoice errors. Large, specialty invoices creates the largest invoice errors.

     

    2. What strategy would you use to reduce invoice errors, given the results of this experiment?

    To reduce invoice errors, orders will be divided into different batches based on the level of product type specialty and size of customer. Invoices based on specialty and then by location followed by location should help reduce invoices errors. This may increase paper work but it will help reduce the error by itemizing based on product type instead of customers alone.

     

     

    b0 =30

    b1=1

    b2=-3.75

    b3=4.75

    b4=-0.75

    b5 =1.25

    b6=2.5

    b7=1

    Regression Coefficients

    RunCustomer Size (x1)Customer Location (x2)Product Type (x3)x1 x2x1x3x2x3x1x2x3No. of ErrorsAverage RR

    1Small (-)Foreign (-)Commodity (-)+++-1515

    2Large (+)Foreign (-)Commodity (-)–++1818

    3Small (-)Domestic (+)Commodity (-)-+-+66

    4Large (+)Domestic (+)Commodity (-)+—22

    5Small (-)Foreign (-) Specialty (+)+–+1919

    6Large (+)Foreign (-)Specialty (+)-+–2323

    7Small (-)Domestic (+)Specialty (+)–+-1616

    8Large (+)Domestic (+)Specialty (+)++++2121

    Customer Size (x1)

    Customer Location (x2)

    Product Type (x3)

    x1 x2

    x1x3

    x2x3

    x1x2x3

    sum+

    64

    45

    79

    57

    65

    70

    64

    sum-

    56

    75

    41

    63

    55

    50

    56

    ave +

    16

    11.25

    19.75

    14.25

    16.25

    17.5

    16

    ave-

    14

    18.75

    10.25

    15.75

    13.75

    12.5

    14

    effect

    2

    -7.5

    9.5

    -1.5

    2.5

    5

    2

    Foreign (-)Domestic (+)Foreign (-)Domestic (+)

    Small (-)156Small (-)1916

    Large (+)182Large (+)2321

    Mild InteractionNo interaction

    Antagonistic interaction

    Smaller effect

    SPECIALTY (+)COMMODITY (-)

    02468101214161820Small (-)Large (+)response rate

    DomesticForeign

    0510152025Small (-)Large (+)response rate

    DomesticForeign

    Commodity (-)Specialty (+)Commodity (-)Specialty (+)

    Small (-)1519Small (-)616

    Large (+)1823Large (+)221

    No interactionMild interaction

    Antagonistic interaction

    Smaller effect

    FOREIGN (-)DOMESTIC (+)

    0510152025Small (-)Large (+)response rate

    SpecialtyCommodity

    0510152025Small (-)Large (+)response rate

    CommoditySpecialty

    Commodity (-)Specialty (+)Commodity (-)Specialty (+)

    Foreign (-)1519Foreign (-)1823

    Domestic (+)616Domestic (+)221

    Mild interactionMild Interaction

    Antagonisic interactionAnatagonistic interaction

    Smaller effectSmaller effect

    LARGE (+)SMALL (-)

    02468101214161820Foreign (-)Domestic (+)response rate

    CommoditySpecialty

    0510152025Foreign (-)Domestic (+)response rate

    CommditySpecialty