Please refer to Practice problem set 4 solutions to get some guidance on this Homework and follow the structure for your solution process.
Please solve the problems using Minitab as the tool.Present the business conclusions in a short non-statistical summary.
Please do the analysis using Minitab and follow the following general structure for presenting your solution to each of the business problems:
State the business problem in plain English
State the equivalent statistical problem that addresses the stated business problem
Identify and list all the necessary variables needed to address the stated statistical problem
List all the data available to address the statistical problem
Present the Minitab results
State the statistical conclusions (drawn from the Minitab analysis)
State your business conclusions/recommendations in a short paragraph or memo in plain English.
Your hospital is negotiating with medical insurance providers, who would like to reduce the amount they pay as reimbursement for hospital stays.For a particular procedure, they would like to reduce payment by $300 and have patients go home one day earlier.To see what effect this would have on hospital costs, a random sample of 50 patients who were recently admitted for this procedure was analyzed.Had they left one day earlier, the average hospital cost would have been $322.44 less, and the standard deviation was found to be $21.71.Construct a 95% confidence interval for the mean net savings for the hospital, per patient, for the larger population of recent patients.
The Glen Valley Steel Company manufactures steel bars.If the production process is working properly, it turns out steel bars with lengths that are normally distributed with a mean of at least 2.8 feet, with a standard deviation of 0.20 foot (as determined by the engineering specifications on the production equipment involved).Longer steel bars can be used or altered, but shorter steel bars must be scrapped.You select a sample of 25 bars, and the mean length is 2.73 feet.Do you need to adjust the production equipment?(use a significance level of 0.05).
Meier and Frank is a chain of department stores located in the Northwest.The company has issued its own credit cards for a number of years.As a new employee in the finance department, imagine that you have been assigned to a major investigation of the firm’s credit policies designed to reduce bad debt losses.You are requested to investigate the relationship between marital status at the time the card is issued and the subsequent payment record of the individual.
You randomly select 100 credit cards issued three years previously.Of the 70 individuals that were married at the time the cards were issued, 11 have defaulted on a payment.Of the 30 individualswho were single when the cards were issued, 7 have defaulted.Do these data present sufficient evidence to indicate that marital status affects credit-worthiness?Use Alpha = 0.05.
(Source: Unknown – 326RL?)
The National Restaurant Association is interested in determining if there is a relationship between the type of pizza pie which Americans prefer and the region of the country in which they live.The association randomly selects 285 Americans and records the category of pizza pie which best describes their preference and the region of the country in which they live.The results are as follows:
Type of PizzaRegion
At α = .10, what can the Association conclude?
Fancy Fish, a fine dining upscale restaurant in Northridge, California and 2016 Open Table Diners’ Choice award winner, is enjoying its eighteenth season of providing delectable food, exceptional service, and beautiful outdoor dining experiences.“Saturday – Half-off Bottled Wine Night” has made Fancy Fish one of the San Fernando Valley’s favorite restaurants.Every Saturday night, guests can enjoy half-off every bottle of wine on the wine list while dining in the restaurant or on the terrace.The owner began offering “Saturday – Half-off Bottled Wine Night” in 2010 as an incentive for guests to dine at Fancy Fish when the economy was in a recession.Now that the economy is booming, the owner is considering whether the promotion should be continued, or even expanded. One concern is the effect that the promotion is having on the overall revenue generated from sales to the participants.
A random sample of 28 checks was collected over the course of one month of Saturday nights. Fourteen checks were from customers participating in the half-off promotion, and the other 14 checks were from customers not participating. The total revenue from each check (less alcohol, tax, and tip) is presented below. Do these data present sufficient evidence that the checks of participants is significantly different from checks of non-participants? What is your recommendation to the owner regarding the status of the promotion?
With Wine Discount
W/O Wine Discount
(Source: Adapted from Smith, R. (2014). Evaluation of L.B’s Tuesdays – Half off bottled wine night (Unpublished class project submission). University of Redlands, Redlands, CA.)
6.A major distillery for alcoholic beverages is interested in gaining a large share of the market composed of people aged 18-23 (in those states where 18 is the legal drinking age).Beer and wine are the traditional favorites of this age group.However, Bill Schuessler, the firm’s marketing manager, and Carol Pringle, manager of research and development, feel that a new version of distilled apple cider will appeal to this younger market.While they are sure that the alcohol content should remain below 5 percent, they are not sure exactly what it should be.Therefore, five versions of the cider have been prepared and each version has been tasted by a random sample of 25 young consumers.Each consumer has evaluated the drink on a 100-point scale, with the higher scores representing a greater liking for the product.The results of the test appear below. What should Schuessler and Pringle conclude?
7.Morning House is a mail-order firm which carries a wide range of rather expensive art objects for homes and offices.It operates by advertising a particular item either in selected magazines or in a direct-mail program.Suppose the sales response varies widely by item and the firm’s management has been unable to predict in advance which items will sell well and which will not.Consequently the firm frequently experiences either stock-outs or excessive inventories.
For many of the products Morning House sells, it is possible to order a limited amount for inventory and to place a subsequent order for delivery within two weeks.Thus, if the firm could make a early prediction of the ultimate sales of a product, its inventory problems would be greatly reduced.Since it takes approximately six weeks to receive 90% of the response to a given campaign, an accurate prediction of total sales made as late as the end of the first week of receiving orders would be useful.
The first week’s sales and total sales of the last 12 campaigns of the firm are shown below.Can the first week’s sales be used to predict total sales?
If something is not clear, ask for clarification by emailing. Do not answer the wrong question (and commit a type III error) and get penalized on the grade.
Here are some common mistakes made on this HW & some suggestions to avoid them:
Not specifying your answer clearly (and require the instructor to fish for the answer)
Explicitly follow the seven parts (a through g) structure to answer each question. Also, follow the structure in in-class and practice problem set solutions for your answers.
Not addressing all the requirements
Read and follow all instructions.Create a checklist for your use to insure your report meets/addresses all requirements.
Choosing the wrong analysis
Be sure to check the number and type of your variables and make sure they are the correct ones for the analysis you choose. (Refer to the Yellow Sheet as necessary.
Not separately stating your answer
State the answer to each part in mathematical terms and with a business conclusion, Follow the in-class and practice sets as examples.
Problem 1- not stating a CI for the savings
Make sure after you calculate the CI for the cost savings, you express your answer as a CI for the savings after adjustment for the change in insurance reimbursement.
Problems 2 and 5- Wrong # of tails or direction of tail(s)
Read the problem carefully
Problem 3- Wrong numbers in the cells
Make sure the grand total is 100
Problem 6- Choosing the wrong analysis
See note above