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.In Cindy's experiment "total asset size of credit customer" is ___.
A)a surrogate variable
B)the dependent variable
C)a blocking variable
D)a treatment variable
E)a constant

Question

Quizplus · Accepted Answer

The total asset size of credit customer is a blocking variable because it is being used to control for potential confounding effects of customer size on the relationship between sales discount rates and average collection period. It is not a treatment variable because it is not being manipulated by the researcher, and it is not a dependent variable because it is not the outcome of interest. It is also not a constant or a surrogate variable.