Cindy Smith, VP of Finance at Digital Components, Inc.(DCI), theorizes that the discount level offered to credit customers affects the average collection period on credit sales.Accordingly, she has designed an experiment to test her theory using four sales discount rates (0%, 2%, 4%, and 6%).Cindy wants to control for the size of the customer but not to test for it as the main variable of interest so she classified DCI's credit customers into three categories by total assets (small, medium, and large).Then, she randomly assigned four customers from each category to a sales discount rate.Cindy's experimental design is a ___.
A)normalized block design
B)completely randomized design
C)factorial design
D)random block design
E)partially randomized design

Question

Quizplus · Accepted Answer

The experimental design is a random block design because the customers are classified into three categories based on total assets and then randomized into four sales discount rate groups. The size of the customer (total assets) is being controlled for by grouping them into blocks, but it is not the main variable being tested.