Course Project: AJ DAVIS DEPARTMENT STORES

Introduction

AJ DAVIS is a department store chain, which has many credit customers and wants to find out more information about these customers. A sample of 50 credit customers is selected with data collected on the following five variables.

1. Location (rural, urban, suburban)
2. Income (in $1,000'sbe careful with this)
3. Size (household size, meaning number of people living in the household)
4. Years (the number of years that the customer has lived in the current location)
5. Credit balance (the customers current credit card balance on the store's credit card, in $).

The data is available in Doc Sharing Course Project Data Set as an Excel file. You are to copy and paste the data set into a minitab worksheet.

Project Part B: Hypothesis Testing and Confidence Intervals

Your manager has speculated the following.

a. The average (mean) annual income was greater than $45,000.

b. The true population proportion of customers who live in a suburban area is less than 45%.

c. The average (mean) number of years lived in the current home is greater than 8 years.

d. The average (mean) credit balance for rural customers is less than $3,200.

1. Using the sample data, perform the hypothesis test for each of the above situations in order to see if there is evidence to support your managers belief in each case AD. In each case, use the Seven Elements of a Test of Hypothesis in Section 6.2 of your text book with = .05, and explain your conclusion in simple terms. Also, be sure to compute the p-value and interpret.
2. Follow this up with computing 95% confidence intervals for each of the variables described in AD, and again interpreting these intervals.
3. Write a report to your manager about the results, distilling down the results in a way that would be understandable to someone who does not know statistics. Clear explanations and interpretations are critical.
4. All DeVry University policies are in effect, including the plagiarism policy.
5. Project Part B report is due by the end of Week 6.
6. Project Part B is worth 100 total points. See the grading rubric below.

Submission: The report from Part 3 and all of the relevant work done in the hypothesis testing (including minitab) in 1 and the confidence intervals (minitab) in Part 2 as an appendix

Format for report:

1. Summary report (about one paragraph on each of the speculations, AD)
2. Appendix with all of the steps in hypothesis testing (the format of the Seven Elements of a Test of Hypothesis, in Section 6.2 of your text book) for each speculation AD, as well as the confidence intervals, including all minitab output

Project Part B: Grading Rubric

Category	Points	%	Description
Addressing each speculation20 points each	80	80	hypothesis test, interpretation, confidence interval, and interpretation
Summary report	20	20	one paragraph on each of the speculations
Total	100	100	A quality paper will meet or exceed all of the above requirements.