The experiment data in below table was to evaluate the effects of three variables on invoice errors for a company. Invoice errors had been a major contributor to lengthening the time that customers

MAT 510 – Homework Assignment

The experiment data in below table was to evaluate the effects of three variables on invoice errors for a company. Invoice errors had been a major contributor to lengthening the time that customers took to pay their invoices and increasing the accounts receivables for a major chemical company. It was conjectured that the errors might be due to the size of the customer (larger customers have more complex orders), the customer location (foreign orders are more complicated), and the type of product. A subset of the data is summarized in the following Table.

Table: Invoice Experiment Error

Customer Size	Customer Location	Product Type	Number of Errors
			15
			18


			19
			23
			16
			21

Customer Size: Small (-), Large (+)

Customer Location: Foreign (-), Domestic (+)

Product Type: Commodity (-), Specialty (=)

Reference: Moen, Nolan, and Provost (R. D. Moen, T. W. Nolan and L. P. Provost. Improving Quality through Planned Experimentation. New York: McGraw-Hill, 1991)

Use the date in table above and answer the following questions in the space provided below:

What is the nature of the effects of the factors studied in this experiment?

The experiment data in below table was to evaluate the effects of three variables on invoice errors for a company. Invoice errors had been a major contributor to lengthening the time that customers 1

The experiment data in below table was to evaluate the effects of three variables on invoice errors for a company. Invoice errors had been a major contributor to lengthening the time that customers 2

The experiment data in below table was to evaluate the effects of three variables on invoice errors for a company. Invoice errors had been a major contributor to lengthening the time that customers 3

The experiment data in below table was to evaluate the effects of three variables on invoice errors for a company. Invoice errors had been a major contributor to lengthening the time that customers 4

The experiment data in below table was to evaluate the effects of three variables on invoice errors for a company. Invoice errors had been a major contributor to lengthening the time that customers 5

The experiment data in below table was to evaluate the effects of three variables on invoice errors for a company. Invoice errors had been a major contributor to lengthening the time that customers 6

Regression Model

Y=30 + 1x1 – 3.75x2 +4.75 x3 – 0.75x1x2 + 1.25 x1x3 + 2.5x2x3 + 1x1x2x3

Customer size has small effect on invoice errors. Product types has the biggest effect on invoice errors. Large, specialty invoices creates the largest invoice errors.

What strategy would you use to reduce invoice errors, given the results of this experiment?

To reduce invoice errors, orders will be divided into different batches based on the level of product type specialty and size of customer. Invoices based on specialty and then by location followed by location should help reduce invoices errors. This may increase paper work but it will help reduce the error by itemizing based on product type instead of customers alone.