Jonathan Marcos

ISDS 361A-02
Project Report Phase 2

Phase 2 Case Study

The case that is provided is based on how many hours the ISDS department will be using
the new printer on a weekly basis and if it is more cost efficient to get a maintenance contract per
year to save on costs. With the information provided, the ISDS department will be using the new
printer for an average of 30 hours per week and a maintenance contract per year is $3000. The
problem we are trying to solve is, is it better to pay every week for maintenance on the printer or
is it better to pay for a maintenance contract per year a better solution. We will use the excel file
given to see how much maintenance is required each week and if it makes sense to continue that
or get a year contract to save money. We will also take a look and see if we can find any
outliners as well in the data provided.
The data provided give us “Weekly Usage” and “Annual Maintenance Expense” to work
with and from there, we find the following: Median, Average, Max, Min, Range, and IQR. Once
all of that is found, we can get a better idea of how much and how little the printer is being used
as well as the most and the least the annual maintenance expense is as well. With the numbers
that we were able to calculate, we are able to see if there are any outliers in the numbers given
and the numbers after they have been calculated and if it is worth getting the yearly maintenance
contract, or keep paying different maintenance costs every year.
Based on the statistics that were created for what was provided, there are no outliers and
without a maintenance contract for the department, they would lose a lot of money annually if
they always fluctuated with different maintenance costs every year instead of paying a fixed rate
of $3000 yearly. The average maintenance expense every year is $3247, so the department
would be losing money, unless they paid the fixed yearly rate. If the department does not get a
fixed maintenance contract for the year, they would be paying an extra $247 a year on average,
which can be saved if they get the fixed rate of $3000 a year which would stay consistent.
Paying a fixed maintenance cost every year will save the department money which can in turn be
used for other things around the department budget.

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 Next we will take a look at the advanced analysis of the maintenance cost and weekly
usage. Maintenance cost would be y = f(x1), which X1 is weekly usage and with the information
provided, we can see what the median would be, and it is $1639. I have made a Scatter Diagram,
that is on the previous page showing an increase of maintenance cost with the weekly usage and
goes to show that if we were to get a yearly contract, we would save a lot more money over the
years, rather than paying more and more. This plays a major factor because on a weekly usage,
the more or less the printers are used, it is covered under the $3000 maintenance contract, so you
would save a lot in the long run.
Based off of the numbers that we were given for the maintenance cost and the weekly
usage, we calculated the regression of the data and got the following, the Standard Error is 6.2,
which means the data is dispersed. The p-value of the data provided show that it is less than the
alpha, so in that case, we Reject H0. Looking at R Squared for both, we can see that they are
both 0.5 which means, is about of the maintenance cost and weekly usage as well. I have posted
the following data below that show off what data was provided. From the data provided as well,
we can see the Confidence Interval and the Prediction Level. As shown, the Lower for both are
40.76 and 42.19 respectively. As for the Upper, they are 185.13 and 183.69, which seems to
show that they are outliers in the data. These are based on a 95% Confidence and Prediction
Interval as well, so the Upper is off the charts as it would seem with the data that was plugged

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 Finally, we look at the Point Estimate from the data provided, which is X = 30 = b0 + b1
x 30, and the answer we get is 920.82. That is the estimated weekly usage in total.
With all the data that has been gathered, we can come to the final conclusion that with the
weekly usage, weather is be high or low without a maintenance contract, the department would
be losing a lot of money. The reason for that, is because the weekly maintenance cost always
fluctuates and over time, it will cost more than what is needed. By getting a maintenance
contract for the year, you would save money monthly at a fixed cost, rather than paying more
weekly. After putting a maintenance contract in place for yearly inconveniences, the department
will have more in their budget to use for other things around the office and other expenses so it
would not hinder their performance as well.

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