You work in the corporate office for Allsup’s franchise that operates 316 stores in Texas and New Mexico. The
per-store daily customer count (i.e., the mean number of customers in a store in one day) has been steady, at
900, for some time. To increase the customer count, the chain is considering cutting prices for coffee
beverages. The small size will now be $0.57 instead of $0.99, and the medium size will be $0.67 instead of
$1.19. Even with this reduction in price, the chain will have a 42% gross margin on coffee.
To test the new initiative, the chain has reduced coffee prices in a sample of 34 stores, where customer counts
have been running almost exactly at the regional franchise average of 900. After four weeks, the stores
sampled stabilized (data attached, assume a normal distribution). Data assign2_S21.xlsx download
Using a 0.05 alpha level determine if there statistical evidence that reducing coffee prices is a good strategy for
increasing the mean customer count. Write a decision paper to the Vice President summarizing your
conclusions. Include considerations that could make a future study even more accurate?
H0: μ ≤ 900
H1: μ > 900
Include, at a minimum, following data for your hypothesis test.
X bar, S, n, egrees of freedom, level of significance (alpha), Critical t value, tSTAT , and the units of the
Standard Deviation. The structure of this decision paper should be as recommended in Power Point from
Assignment 1 and the 6 step hypothesis testing. Be sure to include Problem Statement, Method, Assumptions,
Analysis, and a Recommendation. Make sure and give a data driven recommendation. Write the paper in APA
format, include a title page and references.
Within your Analysis be sure to communicate whether or not the tSTAT falls within or out of the zone of
rejection. Base your decision recommendations on sound statistical processes. Above All Else….Make a
Recommendation in your paper to the vice president
Sample Solution
