WinCo Foods, a large discount grocery retailer in the Western United States, promotes itself as the lowest priced grocery retailer. In newspaper ads WinCo Foods published a price comparison for products between WinCo and several competing grocery retailers. One of the retailers compared against WinCo was Walmart, also known as a low price competitor. WinCo selected a variety of products, listed the price of the product charges at each retailer, and showed the sales receipt to prove the prices at WinCo were the lowest in the area. A sample of the products and their price comparison at both WinCo and Walmart are shown on the left. Do the prices listed indicate that, on average, prices at WinCo are lower than prices at Walmart? Use 5% significance level.
Solve this question using Excel. State the null & alternative hypotheses clearly. Interpret the Excel output and state your conclusion clearly. Provide all your results and comments on this sheet. Specifically, type in your answers in the spaces provided below:
| Item | WinCo Foods | Walmart |
| Bananas (lb) | $0.42 | $0.48 |
| Red Onions (lb) | $0.58 | $0.98 |
| Mini Peeled Carrots (1 lb bag) | $0.98 | $1.48 |
| Roma Tomatoes (lb) | $0.98 | $2.67 |
| Deli Tater Wedges (lb) | $1.18 | $1.78 |
| Beef Cube Steak (lb) | $3.83 | $4.11 |
| Beef Top Round London Broil (lb) | $3.48 | $4.12 |
| Pillsbury Devils Food Cake Mix (18.25 oz) | $0.88 | $0.88 |
| Lipton Rice and Sauce Mix (5.6 oz) | $0.88 | $1.06 |
| Sierra Nevada Pale Ale (12 - 12 oz bottles) | $12.68 | $11.84 |
| GM Cheerios Oat Clusters (11.3 oz) | $1.98 | $2.74 |
| Charmin Bathroom Tissue (12 roll) | $5.98 | $5.48 |
| Bumble Bee Pink Salmon (14.75 oz) | $1.58 | $1.98 |
| Pace Thick & Chunky Salsa, Mild (24 oz) | $2.28 | $2.78 |
| Nalley Chili, Regular w/Beans (15 oz) | $0.78 | $0.78 |
| Challenge Butter (lb quarters) | $2.18 | $2.58 |
| Kraft American Singles (12 oz) | $2.27 | $2.27 |
| Yuban Coffee FAC (36 oz) | $5.98 | $7.56 |
| Totino's Pizza Rolls, Pepperoni (19.8 oz) | $2.38 | $2.42 |
| Rosarita Refried Beans, Original (16 oz) | $0.68 | $0.73 |
| Barilla Spaghetti (16 oz) | $0.78 | $1.23 |
| Sun-Maid Mini Raisins (14 - 0.5 oz) | $1.18 | $1.36 |
| Jif Peanut Butter, Creamy (28 oz) | $2.54 | $1.92 |
| Dole Fruit Bowl, Mixed Fruit (4 - 4 oz) | $1.68 | $1.98 |
| Progresso Chicken Noodle Soup (19 oz) | $1.28 | $1.38 |
| Precious Mozerralla Ball, Part Skim (16 oz) | $3.28 | $4.23 |
| Mrs. Cubbison Seasoned Croutons (6 oz) | $0.88 | $1.12 |
| Kellog's Raisin Bran (20 oz) | $1.98 | $1.68 |
| Campbell's Soup at Hand, Cream of Tomato (10.75 oz) | $1.18 | $1.26 |
Please provide answers to the listed questions below.
Q1: Are the samples related (i.e. dependent) or independent?
Q2: Null Hypothesis:
Q3: Alternative Hypothesis:
Q4: Interpretation of Excel output (Conclusion of Hypothesis test):
Q5: Business Implications:
Answer:
Do the prices listed indicate that, on average, prices at WinCo are lower than prices at Walmart? Use 5% significance level.
Solve this question using Excel. State the null & alternative hypotheses clearly. Interpret the Excel output and state your conclusion clearly. Provide all your results and comments on this sheet. Specifically, type in your answers in the spaces provided below:
Please provide answers to the listed questions below.
Q1: Are the samples related (i.e. dependent) or independent?
Samples related (i.e. dependent). Data are paired on products.
Paired sample t test used.
Q2: Null Hypothesis:
d = prices at WinCo – price at Walmart
Ho: µd=0
Q3: Alternative Hypothesis:
H1: µd < 0
Lower tail test used.
Q4: Interpretation of Excel output (Conclusion of Hypothesis test):
Excel result:
|
t-Test: Paired Two Sample for Means |
||
|
WinCo Foods |
Walmart |
|
|
Mean |
2.302068966 |
2.582068966 |
|
Variance |
6.028059852 |
5.637916995 |
|
Observations |
29 |
29 |
|
Pearson Correlation |
0.97527057 |
|
|
Hypothesized Mean Difference |
0 |
|
|
df |
28 |
|
|
t Stat |
-2.77684222 |
|
|
P(T<=t) one-tail |
0.004839759 |
|
|
t Critical one-tail |
1.701130934 |
|
|
P(T<=t) two-tail |
0.009679518 |
|
|
t Critical two-tail |
2.048407142 |
|
Calculated T= -2.7768, P= 0.0048 which is < 0.05 level of significance. Ho is rejected.
Q5: Business Implications:
There is enough evidence to conclude that prices listed indicate that, on average, prices at WinCo are lower than prices at Walmart.
Since Prices at WinCo are lower than prices at Walmart, WinCo can promotes itself as the lowest priced grocery retailer.
WinCo Foods, a large discount grocery retailer in the Western United States, promotes itself as the...