Question 1

Missy Walters owns a mail-order business specializing in clothing, linens, and furniture for

children. She is considering offering her customers a discount on shipping charges for

furniture based on the dollar-amount of the furniture order. Before Missy decides the

discount policy, she needs a better understanding of the dollar-amount distribution of the

furniture orders she receives.

Missy had an assistant randomly select 50 recent orders that included furniture. The

assistant recorded the value, to the nearest dollar, of the furniture portion of each order. The

data collected is listed below (data set also provided in accompanying MS Excel file).

136 281 226 123 178 445 231 389 196 175

211 162 212 241 182 290 434 167 246 338

194 242 368 258 323 196 183 209 198 212

277 348 173 409 264 237 490 222 472 248

231 154 166 214 311 141 159 362 189 260

a. Prepare a frequency distribution, relative frequency distribution, and percent

frequency distribution for the data set using a class width of $50.

b. Construct a histogram showing the percent frequency distribution of the furnitureorder values in the

HI6007 T12018 Group Assignment Page 2

Question 2

Shown below is a portion of a computer output for a regression analysis relating Y (demand)

and X (unit price).

ANOVA

df SS

Regression 1 5048.818

Residual 46 3132.661

Total 47 8181.479

Coefficients Standard Error

Intercept 80.390 3.102

X -2.137 0.248

a. Determine whether or not demand and unit price are related. Use a = 0.05.

b. Compute the coefficient of determination and fully interpret its meaning.

Be very specific.

c. Compute the coefficient of correlation and explain the relationship between

demand and unit price.

Question 3 6 marks

The following are the results from a completely randomized design consisting of 3

treatments.

Source of Variation

Sum of

Squares

Degrees of

Freedom

Mean

Square F

Between Treatments 390.58

Within Treatments (Error) 158.40

Total 548.98 23

Using a = .05, test to see if there is a significant difference among the means of the three

populations. The sample sizes for the three treatments are equal.

HI6007 T12018 Group Assignment Page 3

Question 4 10 marks

In order to determine whether or not the number of mobile phones sold per day (y) is related

to price (x1 in $1,000), and the number of advertising spots (x2), data were gathered for 7

days. Part of the Excel output is shown below.

ANOVA

df SS MS F

Regression 40.700

Residual 1.016

Coefficients Standard Error

Intercept 0.8051

x1 0.4977 0.4617

x2 0.4733 0.0387

a.

a. Develop an estimated regression equation relating y to x1 and x2. (2 marks)

b. At a = 0.05, test to determine if the estimated equation developed in Part a represents

a significant relationship between all the independent variables and the dependent variable.

(2 marks)

c. At a = 0.05, test to see if ß1 and ß2 is significantly different from zero. (2 marks)

d. Interpret slope coefficient for X2. (2 marks)

e. If the company charges $20,000 for each phone and uses 10 advertising spots, how

many mobile phones would you expect them to sell in a day?

Sample Solution

The life of a celebrity compared to an average person’s life is very different. A rich person lives a more luxuries lifestyle than the average person does. The average person usually only owns a single home where as someone of wealth may own several homes. The normal person is not as fortunate as someone who is rich and can sometimes be envious of what the elite own. The average salary for a middle class family is $60,000 to $85,000 the minimum amount of money you need to live a comfortable lifestyle these days is around $50,000. In order to be considered wealthy it is over a million dollars and with that amount of money you can buy almost anything you want and never have to work again, that is if you are careful with your finances. A rich celebrity on television usually owns a couple of luxurious homes all over the world that’s why we get excited watching them on television and showing all that they own. We, as the viewers, are interested to see what the rich have spent their money on. While we are also jeal>

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