A market research firm is studying the effects of price and type of packaging on sales of a particular product. Twenty-seven stores with shoppers of similar characteristics will be used in the study. The nine combinations of three price levels and three packaging types are the treatments of interest. Total sales of the product over a seven-week period will be recorded. Which of the following describes the best design to use for the study?

a. А A completely randomized design Randomly assign the nine combinations of price level and packaging type that three stores use each combination
b. A completely randomized design. Randomly assign the three price levels so that nine stores use each price level
c. A completely randomized design. Randomly assign the three packaging types so that nine stores use each type of packaging
d. A randomized block design Use packaging as a block. Randomly assign the nine combinations of three price levels and three packaging types so that three stores use each combination
e. A randomized block design. Use packaging as a block Randomly assign nine stores to each packaging type, then randomly assign price level to three stores within each block.

The market research can increase the precision of the result of the study by  

using a randomized block design RBD

The best design the market research company should use for the study is

d. A randomized block design Use packaging as a block. Randomly assign

the nine combinations of three price levels and three packaging types so

that three stores use each combination

Reason:

The given parameters are;

The study = The effect of price and type of packaging

Number of stores in the study = 27 stores

Characteristics of the shoppers in the stores = Similar

Number of packaging type = 3 (three)

Number of price levels = 3 (three)

The number of pair combinations = ⁶₂C - (3, pairs of the same packaging +

3, pairs of the same prices) = 9

Required:

The best design to use for the study

Solution:

Given that the shoppers at each store are similar, in order to differentiate

and show the effect of the price and package combination, it is possible to

group the treatment into groups having a particular characteristics, while

ensuring that the other available treatments are assigned to each member

within a group at least once.

The above design of the study is known as a randomized block design,

therefore;

The correct option is d. A randomized block design Use packaging as a

block. Randomly assign the nine combinations of three price levels and

three packaging types so that three stores use each combinations.

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