IASSC Certified Lean Six Sigma Black Belt (ICBB) — Question 12

A Belt working in a supply chain environment has to make a decision to change suppliers of critical raw materials for a new product upgrade. The purchasing manager is depending on the Belts effort requiring that the average cost of an internal critical raw material component be less than or equal to $4,200 in order to stay within budget. Using a sample of 35 first article components, a Mean of the new product upgrade price of $4,060, and a Standard Deviation of $98 was estimated. The Alternative Hypothesis in the above example is?

Answer options

• A. The Standard Deviation is equal to $300.
• B. The Mean is less than $4,320.
• C. The Mean is equal to $4,060.
• D. The Mean is less than $4,200.
• E. The Mean is greater than $ 4,200.

Correct answer: E

Explanation

The correct answer, E, represents the Alternative Hypothesis which posits that the Mean is greater than $4,200, indicating a potential issue with the budget. Options A, B, C, and D do not align with the focus on the average cost exceeding the budget limit, making them incorrect in this context.