about the type of loom needed to process each fabric during the coming 12 weeks to
meet demands for the three fabrics and not exceed the capacity of the looms in the mill.
Two types of looms are used: Jaquard and Northrop. Jaquard looms can be used to
make all fabrics and are the only looms that can weave certain fabrics, such as plaids.
Demands, variable costs for each fabric, and production rates on the looms are given in
the table below. The mill has 10 Northrop looms and 2 Jaquard looms. Any fabrics that
cannot be woven in the mill because of limited capacity will be purchased from an
external supplier, finished at the mill, and sold at the selling price. In addition to
determining which looms to use to process the fabrics, the manager also needs to
determine which fabrics to buy externally.
From the Sensitivity Report, what cost reduction ($/hour) would make it feasible to
purchase some amount of Fabric 2 from the external supplier rather than just produce
it?
A) $0.6
B) $0.25
C) $0.128
D) $1.1
Which of the following is true about determining the proper form of the hypotheses?
A) H0 is statistically proved true while testing
B) failure to reject H0 proves H1 wrong