Question
AlphaCo takes customer service seriously. Recently the operations department has been pushing for a proposal to increase the investment in finished product inventory to improve
AlphaCo takes customer service seriously. Recently the operations department has been pushing for a proposal to increase the investment in finished product inventory to improve after sales service. The argument is that with a higher level of available finished products, the operations department can easily do replacement for faulty products and thus improve after sales service. However, investment in inventory should be considered cautiously as capital tied up in inventory normally generates lower return than investment in other assets. AlphaCo's management wants to find out if the operations department's hypothesis can be supported by the collected data. You are tasked to perform an association analysis according to the following requirements.
(i) Use an appropriate chart type to examine the relationship between the two variables. Provide a brief justification of your choice. What can you observe and conclude from the chart? (ii) Use an appropriate statistical tool to examine the relationship between the two variables. Clearly present the steps and components of the tool (if any), as well as the result of analysis. What can be concluded from the analysis? Is the conclusion consistent with the observations and conclusions in (b)(i)? (iii) Is it possible to establish a causality between inventory level and after sales service, i.e., increase in inventory level improves/deteriorates after sales service, based on the conclusion in (b)(i) and (b)(ii)?
Data:
Week | Inventory (units) | Complaint (cases) |
1 | 3221 | 37 |
2 | 3236 | 40 |
3 | 3279 | 45 |
4 | 3400 | 43 |
5 | 3409 | 39 |
6 | 3426 | 39 |
7 | 3374 | 51 |
8 | 3214 | 43 |
9 | 3345 | 43 |
10 | 3554 | 45 |
11 | 3731 | 59 |
12 | 3836 | 57 |
13 | 4209 | 41 |
14 | 4190 | 51 |
15 | 4259 | 49 |
16 | 4266 | 52 |
17 | 4271 | 46 |
18 | 4194 | 48 |
19 | 4095 | 45 |
20 | 3904 | 47 |
21 | 3791 | 46 |
22 | 3746 | 43 |
23 | 3899 | 45 |
24 | 4190 | 44 |
25 | 4539 | 41 |
26 | 4586 | 45 |
27 | 4541 | 49 |
28 | 4524 | 55 |
29 | 4505 | 54 |
30 | 4464 | 54 |
31 | 4251 | 51 |
32 | 3896 | 48 |
33 | 3659 | 44 |
34 | 3570 | 42 |
35 | 3839 | 40 |
36 | 4106 | 38 |
37 | 4491 | 33 |
38 | 4424 | 39 |
39 | 4385 | 41 |
40 | 4404 | 49 |
41 | 4361 | 49 |
42 | 4286 | 48 |
43 | 3999 | 45 |
44 | 3740 | 41 |
45 | 3389 | 40 |
46 | 3336 | 37 |
47 | 3581 | 37 |
48 | 3944 | 35 |
49 | 4185 | 32 |
50 | 4084 | 35 |
51 | 4071 | 37 |
52 | 4086 | 38 |
53 | 4129 | 39 |
54 | 3910 | 40 |
55 | 3539 | 39 |
56 | 3406 | 38 |
57 | 3181 | 37 |
58 | 3204 | 35 |
59 | 3365 | 34 |
60 | 3524 | 33 |
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