Question
Case Study: Severance PayWhen one company buys another company, it is not unusual that some workers areterminated. The severance benefits offered to the laid-off workers
Case Study: Severance PayWhen one company buys another company, it is not unusual that some workers areterminated. The severance benefits offered to the laid-off workers are often the subject ofdispute. Suppose that the Laurier Company recently bought the Western Company andsubsequently terminated 20 of Westerns employees. As part of the buyout agreement, itwas promised that the severance package offered to the former Western employees wouldbe equivalent to those offered to Laurier employees who had been terminated in the pastyear. Thirty-six-year-old Bill Smith, a Western employee for the past 10 years, was oneof those let go. His severance package included an offer of 5 weeks severance pay. Billcomplained that this offer was less than that offered to Lauriers employees when theywere laid off, in contravention of the buyout agreement. A statistician was called in tosettle the dispute. The statistician was told that severance is determined by length ofservice with the company. To determine how generous the severance package had been, arandom sample of 50 Laurier ex-employees was taken. For each, the following variableswere recorded: Number of weeks of severance pay Number of years with the companyThe statistician would like to use the above sample information and the appropriatestatistical method to determine whether Bill is correct in his assessment of the severancepackage. Your report should have the following qualities: Your report must be in a genuine report format with problem definition, analysisand final conclusion. All important analysis steps needs to be followed to arrive at the model to beused for prediction. Attach the details of your analysis at the end of your report.Very simplistic analysis with no sufficient details is assigned a near zero credit.Just running excel does not guarantee any credit. Your final conclusion should use both the 95% confidence and predictionintervals. Improper use of these and corresponding wrong/sloppy interpretationsis highly penalized. Graded Case StudyTopic: Chapter 14 (Regression) Use Data Analysis for Regression and then either Data Analysis Plus or theRegression Template provided on the course website for the intervals.
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