Question: The Xang Corporation operates five clothing suppliers in China to provide merchandise for Nike. Nike recently sought information from the five plants. One variable for which data were collected was the total money (in U.S. dollars) the company spent on medical support for its employees in the first three months of the year. Data on number of employees at the plants are also shown. These data are as follows:
Medical $7,400 $14,400 $12,300 $6,200 $3,100
Employees 123 402 256 109 67
a. Compute the weighted mean medical payments for these five plants using number of employees as the weights.
b. Explain why Nike would desire that a weighted average be computed in this situation rather than a simple numeric average.