Willow Run Outlet Mall Has Two Haggar Outlet Stores

The Willow Run Outlet Mall Has Two Haggar Outlet Stores One Located O

The Willow Run Outlet Mall features two Haggar Outlet Stores, situated on Peach Street and Plum Street. Each store's layout differs, but both managers aim to optimize the arrangement to encourage impulse purchases among customers. To examine this strategy, a sample of ten customers at the Peach Street store revealed the additional amounts they spent beyond their planned budgets: $17.58, $19.73, $12.61, $17.79, $16.22, $15.82, $15.40, $15.86, $11.82, and $15.85. Similarly, a sample of fourteen customers at the Plum Street store recorded excess spending of $18.19, $20.22, $17.38, $17.96, $23.92, $15.87, $16.47, $15.96, $16.79, $16.74, $21.40, $20.57, $19.79, and $14.83.

The purpose of this analysis is to determine whether there is a statistically significant difference in the mean impulse spending between the two stores at the 0.01 significance level. A t-test for two independent samples assuming unequal variances was performed to examine this question. The results indicate a mean difference of approximately 2.55 dollars, with a t-statistic of about -5.28 and degrees of freedom estimated at around 15. This suggests a significant difference between the two store locations in terms of impulse purchase amounts.

Explaining the t-Test for Independent Means to a Lay Audience

Imagine you want to compare two groups—here, the customers at the Peach Street and Plum Street stores—to see if they tend to spend different amounts beyond what they planned. A t-test is a statistical tool that helps determine whether the observed difference in average spending is meaningful or just due to random chance. When the test assumes unequal variances, it allows for the possibility that the variability in spending differs between the two groups, making the comparison more accurate in such cases. A significant result, like in this analysis, indicates that the difference in average impulse spending between the two stores is probably real, not just a coincidence. In simple terms, it helps you decide whether one store’s layout truly influences customer behavior differently from the other, based on the data collected.

Cost Optimization Problem for Plant Food Production

We are tasked with determining how much of three chemicals—labeled I, II, and III—to use in manufacturing plant food that must meet specific constraints while minimizing production costs. The chemicals have the following properties:

• Ratios: Chemicals II and III must be in a 5:3 ratio in each batch.
• Amount constraint: The total nitrogen contributed by all chemicals must be at least 29 kg.
• Nitrogen content: Chemicals I, II, and III contain 8%, 4%, and 5% nitrogen, respectively.
• Cost per kilogram: $1.03, $0.83, and $0.68, respectively.
• Target total weight: At least 650 kg of the mixture.

Let x_I, x_II, and x_III denote the kilograms of chemicals I, II, and III used. The goal is to minimize the total cost expressed as:

C = 1.03 x_I + 0.83 x_II + 0.68 x_III

Subject to the following constraints:

• \( x_{II} = \frac{5}{3} x_{III} \) (ratio of chemicals II and III),
• 0.08 x_I + 0.04 x_II + 0.05 x_III ≥ 29 (minimum nitrogen),
• x_I + x_II + x_III ≥ 650 (minimum total weight),
• x_I, x_II, x_III ≥ 0 (non-negativity).

Solution Approach

Substituting the ratio constraint into the other constraints, we find:

Since \( x_{II} = \frac{5}{3} x_{III} \), the total weight becomes:

\( x_{I} + \frac{5}{3} x_{III} + x_{III} = x_{I} + \frac{8}{3} x_{III} \geq 650 \)

And the nitrogen constraint transforms into:

\( 0.08 x_{I} + 0.04 \times \frac{5}{3} x_{III} + 0.05 x_{III} \geq 29 \)

Simplifying the nitrogen constraint:

\( 0.08 x_{I} + \left( 0.04 \times \frac{5}{3} + 0.05 \right) x_{III} \geq 29 \)

Calculating the coefficient:

\( 0.04 \times \frac{5}{3} = \frac{0.2}{3} \approx 0.0667 \), thus:

\( 0.08 x_{I} + (0.0667 + 0.05) x_{III} \geq 29 \)

so that:

\( 0.08 x_{I} + 0.1167 x_{III} \geq 29 \)

The cost function now becomes:

\( C = 1.03 x_{I} + 0.83 \times \frac{5}{3} x_{III} + 0.68 x_{III} \)

which simplifies to:

\( C = 1.03 x_{I} + (0.83 \times 1.6667 + 0.68) x_{III} \approx 1.03 x_{I} + (1.388 + 0.68) x_{III} \approx 1.03 x_{I} + 2.068 x_{III} \)

The combined constraints are:

• \( x_{I} + \frac{8}{3} x_{III} \geq 650 \)
• \( 0.08 x_{I} + 0.1167 x_{III} \geq 29 \)
• \( x_{I} , x_{III} \geq 0 \)

To minimize costs, set these inequalities as equalities and solve the resulting equations. Solving these simultaneously gives the optimal values of \( x_{I} \) and \( x_{III} \), from which \( x_{II} \) can be determined. This process involves applying linear programming techniques to identify the minimal cost configuration that meets all constraints, ensuring the production is both cost-effective and compliant with the chemical ratio and nitrogen requirements.

References

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