Problem 4:Taco Fast Food Chain's Case (20 Points)

Martin Oritz, a purchasing manager of the True Taco fast food chain, was contacted by a salesperson of a food service company. The salesperson pointed out that the higher breakage rate was common in the shipment of most taco shells. Martin was aware of this fact and noted that the chain usually experienced a 10% to 15% breakage rate. The salesperson then explained that his company recently had designed a new shipping container that reduced the breakage rate to less than 5%, and he produced the results of an independent test to support his claim. Martin asked about the price of the shipment. The salesperson said that his company charged $25 for a case of 500 taco shells. It is $1.25 more than True Taco currently was paying. But the salesperson claimed that the lower breakage rate more than compensated for the higher cost, offering a lower cost per usable taco shell than the current supplier. Martin, however, felt that he should try the new product on a limited basis and develop his own evidence. He decided to order a dozen cases and compare the breakage rate in these 12 cases with the next shipment of 18 cases from the current supplier. For each case received, Marin carefully counted the number of usable shells. The results of the usable shells are shown in the below table.

New Supplier Current Supplier 468 444 474 449 474 443 479 440 482 439 478 448 467 441 469 434 484 427 470 446 463 452 468 442 450 444 433 441 436 429