ASCO VALVE CANADA INTRODUCES NEW RED HAT VALVE

With headquarters located in Brantford, Ontario, ASCO Valve Canada is one of

Canada's top producers of solenoid valves. The company was founded in 1965, and

since that time it has emerged as a very successful industrial company that currently

employs 75 people across Canada. ASCO offers an array of products to its clients.

These products range from valves that are used in the gas pipeline industry to valves

that are used in medical procedures.

One of ASCO's goals was to develop a valve that could minimize the cost to

consumers, including cost of operations and the amount of power consumed. In 2005,

ASCO achieved its goal by developing and introducing its new Red Hat Next

Generation valves. Today, these valves are well recognized and respected in many

different countries due to their exceptional performance in difficult conditions. These

valves are also very energy efficient because they are able to use a mere 2 watts of

power rather than the 17 watts of power that the typical solenoid valves use. This is a

very important cost benefit for any company using valves because these new products

can decrease the total cost of ownership by almost 14% over the installed life of the

valve.

The Red Hat Next Generation valves have many advantages, for example, (1)

better and more reliable functionality, (2) reduced usage of power, and (3) modular

design. These advantages have allowed ASCO to provide consumers with better quality

valves at reasonable prices and ensure fast delivery. Recently, ASCO has made it very

clear that one of its objectives was to reduce lead times in order to satisfy customer

demand. Within a short period of time, it has already accomplished this and can deliver

products to its customers at a much faster rate.

2. It is estimated that these Red Hat energy-efficient valves can save a great deal of power usage and lower the total cost of ownership by up to 14% over the installed life of the valve, therefore making the Red Hat valves more attractive. ASCO does business with pipeline companies globally. In an attempt to position itself as a market leader across the world, ASCO is keen on finding out whether the cost saved over the installed life of the valve is significantly different among the different countries in which it does business. Four countries, Canada, Spain, Japan and United States, are chosen for the study. Pipeline companies are selected from each country. The companies keep a log of valve power usage. A random sample of the data is shown below. Test whether there is a difference in relative cost savings in each of these countries. Justify your answer and prepare a short report to present to the management of ASCO in which your conclusions are explained, with support from the statistical test that you performed. Canada Spain Japan U.S. 12% 9% 14% 13% 14 10.5 14 12.5 11.5 11 13 14 10 14 13.5 11.5 14 8.5 12 14 13 12 12.5 13