RES 342 Week 3Week 3 DQ 1

What are some business situation in which ANOVA would be more appropriate than a (Z) or (t) test?

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The advantage that ANOVA has over both the (Z) and (t) test is that multiple variables can be tested at the same time instead of running two different experiments. A t-test only compares one variable with two groups and the Z-test compares the sample and population means to determine a significant difference. With ANOVA, three or more means can be compared without increasing the chance of committing a type I error, which is rejecting a null hypothesis when it is true. The human resource department conducted an experiment to see which type of incentive programs would be implemented to assist in increasing productivity within the organization. Three departments were chosen: marketing, IT, and human resources.

The marketing department was given a standard hour plan. The IT department was given piecework and human resources were given merit programs. ANOVA is used here to provide a significant test of the null hypothesis that these three means are equal. If the test is indeed significant the null hypothesis can be rejected and we can conclude that incentive programs have an effect on productivity.———————-A business situation in which ANOVA would be more appropriate would be: I worked at a bank a few years back and we were in the process of trying out a new system to see if it would be better than the current one we were using. We were ordered to use the new system for 6 months, after the six months the new system was compared to the old one. During the previous six months all the errors from the old system were recorded. The same was done for the new

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