An automotive parts distributor wants to standardize its safety stock level for two parts, A and B. ("Safety stock" is the excess inventory carried above the expected demand level to provide protection against demand variability.) Consequently, the distributor has randomly sampled daily demand for each part over the past 30 days.

a. State the appropriate null and alternative hypotheses to test if the variances of the daily demand values for the two parts are different.

b. Calculate the value of the test statistic. Assume demand is normally distributed.

c. Use Excel's F.TEST function to calculate the p-value.

d. Make a conclusion at the 5% significance level.

e. Is your conclusion sensitive to the choice of the significance level, α? Explain.