Nirma University

Institute of Management
Online Assignment in lieu of Supplementary End Examination, June 2020
Master of Business Administration, Term I
Course Code & Title: MFT4CCOQ02, Data Analytics for Managers

Date and time of Submission: 04/07/2020 by 12.00 pm Max. Marks : 50

Instructions:
1. All questions are compulsory.
2. Marks will be awarded only if the workings are shown in the answer sheet.
3. Submit the assignment in PDF format on MOODLE. Please make sure that you submit it
on the relevant course page only.
4. Required data to solve Question 1 is given in the attached Excel data file.
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Question 1: (30 Marks)
Can demographic information be helpful in predicting sales of sporting goods
stores? The data stored in the file data.xls are the monthly sales totals from a
random sample of 38 stores in a large chain of nationwide sporting goods stores.
All stores in the franchise, and thus within the sample, are approximately the
same size and carry the same merchandise. The county or, in some cases,
counties in which the store draws the majority of its customers is referred to
here as the customer base. For each of the 38 stores, demographic information
about the customer base is provided. The variables in the data set are

Sales- Latest one-month sales total (dollars)

Age- Median age of customer base (years)
HS- Percentage of customer base with a high school diploma
College- Percentage of customer base with a college diploma
Growth-Annual population growth rate of customer base over the past 10 years
Income- Median family income of customer base (dollars)
a. Identify a key independent variable using correlation analysis between two
variables. Construct a scatter plot, using sales as the dependent variable and
key independent variable identified. Discuss the scatter diagram.
b. Assuming a linear relationship, compute the regression coefficients b0 and
b1.
c. Interpret the meaning of the slope, b1, in the context of this problem.
d. Compute the coefficient of determination, r2, and interpret its meaning.
e. At the 0.05 level of significance, is there evidence of a linear relationship
between the selected independent variable and the dependent variable? Use
critical value approach.

In the above case, you have developed regression model to predict monthly sales
at a sporting goods store. Now, write a report based on the model you have
developed and append to your report appropriate charts and statistical
information.

Question 2: (20 Marks)

Alpha Consultancy (AC) established in 1980 for the purpose of providing
business solutions to its clients. During the course of time, AC expanded its
arms to different countries in the world and become a successful premier
consultant firm in US. AC achieved all these through its ethical business
practices which Mr. Andrew Timothy the CEO of AC religiously followed. In 2014,
Ms. Alice Wonderland (AW) approached AC to provide a solution to the business
problem that she was facing. She wants to know whether there is any difference
in the average annual cost of supporting a family of four Americans for a year in
different foreign cities.

The lifestyle of living in the US on an annual income of $75000 was the standard
against which living in foreign cities was compared. AC have randomly selected
11 families each from Toronto and Mexico and their annual cost of supporting a
family has been recorded. Assume that the annual cost is normally distributed
and population variances are equal and unknown.

Toronto Mexico
69000 65000
64500 64000
67500 66000
64500 64900
66700 62000
68000 60500
65000 62500
69000 63000
71000 64500
68500 63500
67500 62400

AW wants to address the following questions based on the data.

1) Can we conclude that the average annual cost is higher in Toronto? Justify.
2) Is Mexico has higher variability in annual cost? Justify.
3) What could be a suitable hypothesis to address AW’s problem. Test the
hypothesis at 5% level of significance using critical value approach. What would
be your conclusion?