Ans2)

Constructs:
Construct 1 (A4, A5, A6): Process Innovation
Construct 2 (A11, A12, A10): Responsiveness to New Knowledge
Construct 3 (A2, A3, A1): Success of New Products
Construct 4 (A7, A8, A9): Supplier’s Technical Competency
Construct 5 (P1, P2, P3): Profits

Hypotheses:
H1: Process innovation in supply chain has an influence on success of new products.
H2: Responsiveness to new knowledge has an influence on success of new products.
H3: Supplier’s technical competency has an influence on success of new products.
H4: Success of new products has an impact on profits.

Block Diagram:

Ans2)
Process Innovation:
Construct 1

Responsiveness to new Success of New Products:

Profits: Construct 5
knowledge: Construct 2 Construct 3

Supplier’s Technical
Competency: Construct 4

P.T.O

Factor λ λ2 ε = 1-λ^2
 A4 0.8920 0.7957 0.2043
F1 A5 0.8550 0.7310 0.2690
A6 0.6590 0.4343 0.5657
Sum 2.4060 1.9610 1.0390
 
A11 0.8580 0.7362 0.2638
F2 A12 0.7560 0.5715 0.4285
A10 0.6740 0.4543 0.5457
Sum 2.2880 1.7620 1.2380
 
A2 0.8730 0.7621 0.2379
F3 A3 0.7740 0.5991 0.4009
A1 0.6630 0.4396 0.5604
Sum 2.3100 1.8008 1.1992
 
A7 0.8400 0.7056 0.2944
F4 A8 0.7030 0.4942 0.5058
A9 0.6430 0.4134 0.5866
Sum 2.1860 1.6133 1.3867

AVE CR
F1 0.6537 0.8478
F2 0.5873 0.8087
F3 0.6003 0.8165
F4 0.5378 0.7751

Formulae:
AVE= Sum λ2/N
CR= (Sum λ2)/[ (Sum λ2) + ε]

Answer: As AVE > 0.5, and CR > 0.7 for all constructs, we can say convergent validity is established.