Questions and Answers of Practical Business Statistics

Reconsider the three estimates from the previous problem. Are confidence intervals readily available? How might these confidence intervals be useful?
Using your imagination, create an executive summary paragraph for a hypothetical report based on each of the situations in problem 1.
What are the five basic ways in which data sets can be classified?
Quality control has been a problem with a new product assembly line, and a multiple regression analysis is being used to help identify the source of the trouble. The daily ?percent defective? has
Identify three time-series data sets of interest to you. For each one, a. As there a definite time trend? b. Are there seasonal effects?
Choose a firm and name two quantitative variables that might be important to that firm. For each variable, indicate whether it is discrete or continuous.
Choose a firm and name two quantitative variables that might be important to that firm. For each variable, indicate whether it is discrete or continuous.
Repeat the previous problem, but for multivariate data. Previous ProblemName two different bivariate data sets that relate directly or indirectly to your responsibilities. In each case, identify
Name two different bivariate data sets that relate directly or indirectly to your responsibilities. In each case, identify the meaning of the relationship between the two factors, and indicate
Give two examples of hypothesis testing situations that a business firm would be interested in.
Look through recent material from the Wall Street Journal. Identify an article that relies directly or indirectly on statistics. Briefly describe the article (also be sure to give the title, date,
List two kinds of routine decisions that you make in which statistical hypothesis testing could play a helpful role.
Name three numerical quantities a firm might be concerned with for which exact values are unavailable. For each quantity, describe an estimate that might be useful. In general terms, how reliable
Choose a business firm, and list the ways in which statistical analysis could be used in decision-making activities within that firm.
Describe a recent decision you made that depended, in part, on information that came from data. Identify the underlying data set and tell how a deeper understanding of statistics might have helped
Refer to the data for problem 8. a. Find the critical value from the chi-squared table for the 5% level and report the result of the chi-squared test. b. Find the critical value from the
Refer to the data for problem 5. a. What does the null hypothesis of independence claim, in practical terms, for this situation? b. How many managers responding “Worse” would you expect
Is it OK to repeat material in the introduction that already appeared in the executive summary?
For the previous problem, interpret the regression coefficient for labor by estimating the average final cost associated with each dollar that management identified ahead of time as being labor
a. Perform a two-sided test at the 1% significance level for the previous problem and describe the result. b. State the p-value as either p>0.05, p<0.05, p<0.01, or p<0.001. c.
Viewing the database in Appendix A as a random sample from a much larger population, consider the percentage of women. Find the 95% confidence interval.Appendix A. 36 49,033 53 8 Following are the
Suppose two events are independent. One event has probability 0.27, while the other has probability 0.64. a. Find the probability that both events happen. b. Find the probability of the
For the preceding problem, compare the coefficient of variation before and after the sales goal adjustment. Why does it change (or not change) in this way?Preceding problemYou are the sales manager
For the previous problem, compare the coefficient of variation before and after the price increase. Why does it change (or not change) in this way?.Previous Problem Your costs had been forecast
For the genders: a. Summarize by finding the percent of each category. b. Find the mode. What does this tell you?Appendix A 36 49,033 53 8 Following are the employee records of an
What problems, if any, are visible in the control charts in Fig. 18.5.5? What action (if any) would you suggest? Fig 18.5.5 10- 10 10 10 15 15 Averages Ranges
What problems, if any, are visible in the control charts in Fig. 18.5.4? What action (if any) would you suggest? Fig 18.5.4 10 10 15 10 15 10 Averages sebuey
What problems, if any, are visible in the control charts in Fig. 18.5.3? What action (if any) would you suggest? Fig 18.5.3 10 10 - 5 15 10 15 10 Averages
a. What is the purpose of the X̅ chart? b. What is a typical sample size? c. How would you find the center line if you had no standard? d. How would you find the center line if you
Are your customers special? In particular, is their interest level in your promotional newsletter higher than for potential customers (who are not currently customers)? Justify your answer by
What is the purpose of the chi-squared test for independence?
What is the purpose of the chi-squared test for equality of percentages?
Perform a nonparametric analysis of prescription drug prices in the United States and Canada, as reported in Table 16.4.7. a. Is this a paired or unpaired situation? b. Are prices
The number of items returned for each of the past 9 days was 13, 8, 36, 18, 6, 4, 39, 47, and 21. Test to see if the median number returned is significantly different from 40 and find the p-value (as
Are tasting scores significantly different for the Chardonnay and Cabernet-Sauvignon wines listed in Table 10.7.6? Is this a paired or unpaired situation? TABLE 10.7.6 Wine-Tasting Scores
Would there be any problem with a nonparametric analysis (two unpaired samples) of data in Table 10.7.8 listing day care rates comparing those of the well-to-do Laurelhurst area to other parts of
Another experiment in the report by Meyers-Levy and Peracchio involved the evaluation of bicycle pictures taken with various camera angles, as evaluated by two groups of individuals with different
Camera angle can make a difference in advertising; it can even affect the viewer’s evaluation of a product. A research article reported a main effect for camera angle (F2,29 = 14.48, p<0.001)
Do the sample sizes have to be equal in the one-way analysis of variance?
What assumptions are required concerning the distribution of each population?
Which assumption helps the data be representative of the population?
The number of job openings fluctuates through time, providing useful information about the current state of the economy and possibilities for the future. Table 14.4.11 shows the computed results of a
Gross Domestic Product (GDP) is an important measure of total production and is used by business to help guide their planning for the future. Table 14.4.8 shows a BoxJenkins analysis of the
Your seasonally adjusted monthly sales forecast is $382,190 +$4,011 (Month number), where the month number is 1 for Jan. 2011 and increases by 1 each month. The seasonal index for February sales is
Which type of time-series analysis would provide the simplest results for studying the demand for heating oil, which tends to be highest in the winter?
Consider the time series of quarterly sales in thousands shown in Table 14.4.6. The seasonal indices are 0.89 for quarter 1, 0.88 for 2, 1.27 for 3, and 0.93 for 4. a. Find the seasonally
The number of diners per quarter eating at your apres-ski restaurant has been examined using trend-seasonal analysis. The quarterly seasonal indexes are 1.45, 0.55, 0.72, and 1.26 for quarters 1, 2,
Consider PepsiCo’s quarterly net revenue as shown in Table 14.4.5. a. Draw a time-series plot for this data set. Describe any trend and seasonal behavior that you see. b. Plot the moving
Amazon.com is an e-commerce firm that has shown considerable growth since its founding in 1995, and its quarterly net sales are shown in Table 14.4.4. Their 2014 annual report includes a section
Table 14.4.3 shows the quarterly net sales of Mattel, a major designer, manufacturer, and marketer of toys. Because of seasonal gift giving, you might expect fourth-quarter sales to be much higher,
Consider Intel’s Net Revenue in Table 14.4.2. a. Construct a time-series plot for this data set. Describe the seasonal and cyclic behavior that you see, as well as any evidence of irregular
Consider the Walt Disney Company’s quarterly revenues as shown in Table 14.4.1. a. Draw a time-series plot for this data set. Describe any trend and seasonal behavior that you see. b.
Which time-series method of analysis would be most appropriate to a situation in which prices are lower at harvest time in the fall but are typically higher the rest of the year and in which there is
Which time-series method of analysis would be most appropriate to a situation in which forecasts and confidence limits are needed for a data set that shows medium-term cyclic behavior?
What kinds of additional terms are needed to include seasonal behavior in advanced ARIMA models?
Distinguish stationary and nonstationary time-series behavior.
What important information is missing from each of the following references?a. Personal communication, 2016. b. Business Week, p. 80. c. Basic Business Communication (Burr Ridge, Ill.:
How can you find synonyms for a given word? Why might you want to?
How would you check the meaning of a word to be sure that you are using it correctly?
What is the relationship between the outline and the finished report?
When is the best time to write the introduction and executive summary, first or last? Why?
What can you do to help those in your audience who are short of time?
Should you assume that everyone who reads your conclusion is already familiar with all of the details of the analysis and methods section?
How can you use the executive summary and introduction to reach a diverse audience with limited time?
How can an outline help you?
What is the primary purpose of writing a report?
In a multiple regression, what would you suspect is the problem if the R2 is large and significant, but none of the X variables has a t test that is significant?
Productivity is a concern. For each employee, you have data on productivity as well as other factors. You want to know how much these factors explain about the variation in productivity from one
In order to substantiate a claim of damages, you need to estimate the revenues your firm lost when the opening of the new lumber mill was delayed for three months. You have access to data for similar
It is budgeting time again, and you would like to know the expected payoff (in terms of dollars collected) of spending an extra dollar on collection of delinquent accounts, after adjusting for the
Your firm is wondering about the results of magazine advertising as part of an assessment of the marketing strategy. For each ad, you have information on its cost, its size, and the number of
Why should variables measured in the same basic units be transformed in the same way?
Identify the structure of the scatterplot in Fig. 11.3.6. FIG. 11.3.6
Identify the structure of the scatterplot in Fig. 11.3.5. FIG. 11.3.5
On Monday, your business produced 7 items which cost you $18. On Tuesday, you produced 8 costing $17. On Wednesday, you produced 18 costing $32. On Thursday, you produced 3 items costing $16. Using a
Which of the following correlation coefficients corresponds to a moderately strong relationship with higher X values associated with higher Y values: r = 1, r = 0.73, r = 0.04, r = –0.83, or r =
One day your factory used $385 worth of electricity to produce 132 items. On a second day, $506 worth of electricity was consumed to produce 183 items. On a third day, the numbers were $261 and 105.
Given the correlation r = 0.307 and the least-squares prediction equation Y = 55.6 + 18.2X, find the predicted value for Y when X is $25.
Given the correlation r = -0.603 and the least-squares prediction equation Y = 38.2–5.3X, find the predicted value for Y when X is 15.
For each of the scatterplots in Figs. 11.3.1–11.3.4, say whether the correlation is closest to 0.9, 0.5, 0.0, -0.5, or -0.9. FIG. 11.3.1 FIG. 11.3.2 FIG. 11.3.3 FIG. 11.3.4
The least-squares prediction equation is, predicted costs = 35.2 + 5.3 (items), with predicted costs measured in dollars. Find the predicted value and residual for a situation with costs of $600 and
In the territory versus sales example (based on the data from Table 11.2.3), the least-squares line to predict sales based on the population of the territory was found to be Expected sales =
Consider the number of transactions and the total dollar value of merger and acquisition deals in the oil and gas industry, from Table 11.1.6. a. Find the regression equation for predicting the
A linear regression analysis has produced the following equation relating profits to hours of managerial time spent developing the past year’s projects at a firm: Profits = -$957 + $85Number of
What is extrapolation? Why is it especially troublesome?
a. Which is usually better, a lower or a higher value for R2? b. Which is better, a lower or a higher value for Se?
Distinguish correlation and regression analysis.
Distinguish correlation and regression analysis.
A cup of coffee is found to have only 72.8 milligrams of caffeine. Test (at the 5% level) whether the beans used could have come from the same population as those that generated the data in problem
You are analyzing the results of a consumer survey of a product, rated on a scale from 1 to 10. For the 130 consumers who described themselves as “outgoing,” the average rating was 8.36, and the
To understand your competitive position, you have examined the reliability of your product as well as the reliability of your closest competitor’s product. You have subjected each product to abuse
Your broker achieved a rate of return of 18.3% on your portfolio last year. For a sample of 25 other brokers in the area, according to a recent news article, the average rate of return was 15.2% with
World investments markets were highly volatile in 1998. Table 10.7.4 shows one-year rates of return on closedend mutual funds that specialize in income from international sources. a. Do the
Selected mutual funds that practice socially aware investing, with year-to-date rates of return, are shown in Table 10.7.3. On average, these funds lost value in the first half of 2010, in the sense
Dishwasher detergent is packaged in containers that claim a weight of 24 ounces. Although there is some variation from one package to another, your policy is to ensure that the mean weight for each
You are supervising an audit to decide whether or not any errors in the recording of account transactions are “material errors.” Each account has a reported balance, whose accuracy can be
Managers perceived employee stock ownership as having a significant positive effect on product quality. As part of that same study, managers were also asked to rate the effect of employee stock
A recent poll of 1,423 randomly sampled likely voters shows your favorite candidate ahead, with 51.93% in favor. There are two candidates. Use hypothesis testing to infer to the larger group of all
Production yields vary and can be high or low on a given day. If they are high, you want to find out why so that yields could be similarly increased on other days. If they are low, you want to fix
Here are the satisfaction scores given by 12 randomly selected customers: 89, 98, 96, 65, 99, 81, 76, 51, 82, 90, 96, 76 Does the observed average score differ significantly from the target score of

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