product to its distributors and wholesalers in a certain area. Each of the companies has
different operating procedures and uses different routes. Assuming that certain
minimum standards for delivery time are achieved, the manufacturer wants to select the
company with the lowest unit shipping cost.
In addition, the manufacturer believes that the type of packaging used for the product
may have an impact on shipping cost and is considering two types of packaging. It is
unknown whether or not any of the three companies under consideration is better
equipped to handle either type of packaging.
After using each of the companies for five deliveries of the product with each of the
types of packaging (thus, each company made a total of 10 deliveries, with all
deliveries under similar circumstances), the shipping costs per unit were calculated and
are shown below:
Company
Package C1 C2 C3 Total
Mean
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$1.75 $1.25 $1.80
1.65 1.15 1.70
P1 1.90 1.35 1.95 24.30
1.62
2.00 1.15 1.75
1.70 1.15 2.05
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2.00 1.35 1.95
1.90 1.55 2.05
P2 2.15 1.35 2.30 27.80
1.85
2.25 1.35 2.00
1.95 1.45 2.20
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Total 19.25 13.10 19.75 52.10 1.74
Mean 1.93 1.31 1.98