Anova

At Rapid Displays and Cadaco advertising kits are produced and shipped. As of recently, the amount of kits that need to be produced has increased. Previously we have tested just the salary of the employees. Now we are going to do an ANOVA test to make comparisons between other factors that may effect Cadaco's production. The initial question at hand was if Rapid Displays and Cadaco should pay the employees' overtime or should they hire more employees. We are now going to add a few other factors to see if those also impact the production.

The factors that were added and that will be compared are the hourly wages of the temps, the number of kits made by each employee, and the time in minutes each employee uses for a break. We kept out initial data which was the hourly pay of the current employees so we could compare that data with the new data as well.

The first thing that we did was gather all the numerical information needed to actually test our hypothesis. We found out that there are 13 employees who produce the advertising kits who are paid between $7.50 through

$12.00 an hour. At first, these 13 employees had four days to produce 9,000 advertising kits. This broken down is 692 kits per employee and 173 kits per day per employee. Broken down even further, it means each employee has to create 21 kits per hour to meet the goal of 9,000 kits in four days. This goal was easily met, but now there is the issue of increased production. Which costs Rapid Display in average of $56 - $96 per day not including over time.

Now, there needs to be 14,000 kits produced in four days instead of the original 9,000. This broken down is 1,076 kits per employee and 269 kits per day. This means that the employees have to make 33 kits per hour instead of the 21 kits initially. This is a large increase for production and the 13 employees are not able to produce these kits in the eight-hour workday and have to work overtime. Giving the employees time and a half for every hour worked over his or her shift pays overtime. To produce the 5,000 extra kits, it will cost Rapid Displays and Cadaco $234.00 a day extra and $934.00 per every four days. The question is if more employees are hired, will the costs of production go down?

Step two select the level of significance; we will use the .01 and .05 level of significance to determine how confident we are of our decision. The alpha level