Problem: Fast-food franchiser, Bob Nostats, is considering building a restaurant at a certain location. Based on financial analyses for this type of restaurant, a site is acceptable (profitable) only if the number of pedestrians passing the location averages more than 100 per hour. The number of pedestrians observed for each of 40 randomly selected hours was recorded and can be found in the Excel worksheet titled Pedestrians in the Case #1 Data file posted on Carmen > Content > Cases > Group Case #1. Bob has hired your team to advise him about the viability of this location.

Bob has required that you specifically address each of the following in your analysis:

Since he does not want to incur the losses that would be inevitable if he builds a restaurant at a location that is not acceptable, he requires that when you run the hypothesis test, you use a 1% significance level..

Since he is aware that he will incur an opportunity cost if the location is acceptable but he does not build the restaurant, he requires that you determine the probability that the location will be found unacceptable when the actual average number of pedestrians passing the location is 104 per hour.

You and your team are eager to establish a reputation in the consulting business. After completing the required analysis, you decide to add some pro bono analysis in your report to Bob. Specifically, you recognize that you can advise him on what he could do to improve his chances of accepting a location for which the actual average number of pedestrians passing the location is 104 per hour. Include this extra, unsolicited analysis in your report to him. All supporting work must be included.