# Statistics Question

Project Description:
can be a for-profit, non-profit, small or large entity. The following are not
acceptable topics:
• A specific application/problem discussed in class
• An application that uses descriptive statistics (i.e., graphs, percentages,
measures of central tendency or dispersion)
The statistical procedure you choose to illustrate MUST be one that was covered
in this course.
You do not have to collect actual data from a business or apply the statistical
To complete your project, copy and paste the form on the second page of this
document. Then, fill in all the blanks. You can adjust the size of the answer
spaces as necessary – the lines are just there to indicate where the answers go.
Do not hand in this instruction page.
Be concise. Your project submission must not exceed two (2) pages in length
(12-point font).
You must write this. Copies of documents/analyses written by someone else will
not be accepted.
Submit this project via the course website.
The form provided is in bold font. Do not use bold font for your responses.
Using a colored font (other than red) for your responses is preferable.
Hints:
1
If you need help finding ideas for business applications, read the problems at the
end of the relevant sections/chapters of the textbook. These problems usually
If you have difficulty finding an actual business application, you can design and
propose one for a specific business.
2
Special Project
Name:_________________________________________
Date: ____________
Part A: Description of Business Context
Write a brief summary of the business context (e.g., manufacturing, marketing,
finance, etc.) including the name of the company or organization.
________________________________________________________________________
________________________________________________________________________
Part B: Problem/Issue
State the business problem/issue to be addressed using statistics and why this
problem/issue is important to the company/organization.
________________________________________________________________________
________________________________________________________________________
Part C: Statistical Procedure
Explain the statistical procedure (NOTE: Focus on ONE statistical procedure only)
1. Independent variable:
a) What is the variable: ___________________________________________
b) How it is measured, i.e. what units or categories are used (e.g., revenue
measured in “dollars”; height measured as “short, average, tall”)
_______________________________
c) Level of measurement (nominal, ordinal, interval, or ratio):
________________________________________
2. Dependent variable:
a) What is the variable: ___________________________________________
b) How it is measured, i.e. what units or categories are used (e.g., revenue
measured in “dollars”; height measured as “short, average, tall”)
_______________________________
c) Level of measurement (nominal, ordinal, interval, or ratio):
________________________________________
3. Name of the procedure/formula (e.g., ANOVA, Chi-Square, Hypothesis
Test using z formula, Regression Analysis, etc.). NOTE: The procedure/
formula must be one that was covered in the course:
__________________________________________________________________
3
4. Describe the statistical rationale/justification for choosing this
procedure/formula:
_______________________________________________
__________________________________________________________________
5. Describe how the data are collected by the business/organization:
__________________________________________________________________
6. Describe how the data are analyzed (i.e., identify the steps in the statistical
procedure): ______________________________________________________
__________________________________________________________________
Part D: Decision/Interpretation
Explain the type of business decision that the company/organization would make
as a result of this statistical analysis. ________________________________
________________________________________________________________________
4
Special Project (Example #2)
Name:
Student B
Date: ____________
Part A: Description of Business Context
Write a brief summary of the business context (e.g., manufacturing, marketing,
finance, etc.) including the name of the company or organization.
Crystal Geyser (Company) sells bottled water, collected from alpine springs,
through various U.S. retail channels.
Part B: Problem/Issue
State the business problem/issue to be addressed using statistics and why this
problem/issue is important to the company/organization.
Several new competitors have entered the market during the past year, eroding
some of the Company’s customer base. The Company wants to revive its sales
through the implementation of a new marketing campaign. As part of this
process, the Company wants to determine the popularity of its product among
customers of different socioeconomic status.
Part C: Statistical Procedure
Explain the statistical procedure (NOTE: Focus on ONE statistical procedure only)
1. Independent variable:
a) What is the variable: Socioeconomic status
b) How it is measured (e.g., revenue measured in “dollars”; height
measured as “short, average, tall”) Low, middle, high
c) Level of measurement (nominal, ordinal, interval, or ratio): Ordinal
2. Dependent variable:
a) What is the variable: Frequency of purchase
b) How it is measured (e.g., revenue measured in “dollars”; height
measured as “short, average, tall”) Never purchase, occasionally
purchase, frequently purchase
c) Level of measurement (nominal, ordinal, interval, or ratio): Ordinal
3. Name of the procedure/formula (e.g., ANOVA, Chi-Square, Hypothesis
Test using z formula, Regression Analysis, etc.). NOTE: The procedure/
formula must be one that was covered in the course: Chi-Square test
1
4. Describe the statistical rationale/justification for choosing this procedure/
formula: Chi-Square test for independence is used when the independent
variable has 2 or more groups (nominal or ordinal level) and when the
dependent variable is measured at the nominal or ordinal level.
5. Describe how the data are collected by the business/organization: The
Company hired a market research firm to conduct a survey of a sample of
customers drawn from the target population. Response data were
collected via a telephone survey.
Describe how the data are analyzed (i.e., how the statistical procedure is
performed): The null and alternative hypotheses are defined (H0: There are no
differences among the groups with respect to their frequency of purchase.
H1: There are differences among the groups with respect to their frequency of
purchase.); an alpha level is set; Chi-square is calculated using the formula: χ2
= ∑[(fi,j – ei,j)2 ÷ ei,j]; the calculated χ2 value is compared to the critical χ2 value
(found in the χ2 table); if χ2 calculated < χ2 critical H0 is accepted and if χ2 calculated > χ2 critical H0 is rejected.
Part D: Decision/Interpretation
Explain the type of business decision that the company/organization would make
as a result of this statistical analysis. If H0 is accepted, Crystal Geyser can
conclude that it does not need to differentiate its advertising/marketing strategy
by socioeconomic status. If H0 were rejected, Crystal Geyser would further
analyze the survey results to determine which socioeconomic group(s) to
specifically target in its new marketing campaign.
2
STATISTICS FOR BUSINESS – MNS 601
Special Project (Example #1)
Name:
Student A
Date: ____________
Part A: Description of Business Context
Write a brief summary of the business context (e.g., manufacturing, marketing,
finance, etc.) including the name of the company or organization.
The economic crisis affected many industries, particularly the automobile
manufacturing industry. As gas prices soared and jobs were lost, consumers
demanded more fuel-efficient vehicles. The companies that suffered the most
were the ones that continued to produce gas-guzzling vehicles such as trucks
and SUVs, among these manufacturers was Ford Motor Company (Ford). Ford
lost sales quickly during this period and needed a solution soon or risk complete
failure like some of its unlucky competitors.
Part B: Problem/Issue
State the business problem/issue to be addressed using statistics and why this
problem/issue is important to the company/organization.
An example of Ford’s response to the fuel-efficient vehicle market was the new
Focus SE, a model that claims to get 40 MPG. It is important for car
manufacturers, such as Ford, to accurately assess MPG in order to maintain the
integrity of the company’s product as well as to continue attracting future
customers. Therefore, the use of statistics will either validate or invalidate Ford’s
claim that the new Focus SE gets 40 MPG.
Part C: Statistical Procedure
Explain the statistical procedure (NOTE: Focus on ONE statistical procedure only)
1. Independent variable:
a) What is the variable: Type of Car
b) How it is measured (e.g., revenue measured in “dollars”; height
measured as “short, average, tall”) Car make and model
c) Level of measurement (nominal, ordinal, interval, or ratio): Nominal
2. Dependent variable:
a) What is the variable: Mileage (MPG)
b) How it is measured (e.g., revenue measured in “dollars”; height
measured as “short, average, tall”) Miles per gallon (MPG)
MNS 601 Special Project
1
3.
4.
5.
6.
c) Level of measurement (nominal, ordinal, interval, or ratio): Ratio
Name of the procedure/formula (e.g., ANOVA, Chi-Square, Hypothesis
Test using z formula, Regression Analysis, etc.). NOTE: The procedure/
formula must be one that was covered in the course: Hypothesis test (One
sample t test)
Describe the statistical rationale/justification for choosing this
procedure/formula: Need to test the hypothesis that the population mean
for the Ford Focus SE is 40 MPG. A t-test is appropriate here because the
following assumptions for a t-test are met in this problem, specifically the
standard deviation of the population is unknown and the dependent
variable is at the interval or ratio level of measurement.
Describe how the data are collected by the business/organization: Ford
test-drove a random sample of Ford Focus SE cars and calculated the MPG
for each vehicle.
Describe how the data are analyzed (i.e., how the statistical procedure is
performed): The null and alternative hypotheses are defined (H0: u = 40
MPG, H1: u ≠ 40 MPG); an alpha level is set; the mean MPG for the sample
of cars is calculated; the calculated t value is determined using the formula
t = (sample mean – population mean) ÷ (s / √ n); the calculated t value is
compared to the critical t values (found in the t-table); if t calculated < t critical H0 is accepted and if t calculated > t critical H0 is rejected.
Part D: Decision/Interpretation
Explain the type of business decision that the company/organization would make
as a result of this statistical analysis. If H0 is accepted, Ford can confidently
market the Ford Focus SE as having a mileage rating of 40 MPG. If H0 is rejected,
Ford would not be able to advertise the Ford Focus SE as having a mileage rating
of 40 MPG and may decide to perform additional quality tests on the model to
identify any deficiencies.
MNS 601 Special Project
2

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