Question 1

The customer service division of a telecommunications firm, which has been operating an optional
work-from-home policy since 2015, wants to decide whether to permanently switch to a tele-
commuting system where all employees work from home. The HR department plots the share of
employees working from against average ticket resolution time (which is the division’s measure of
efficiency – the lower, the better) for each month between 2015 and 2020 and produces the
following visualization:

Figure Q1

350.00
340.00
Ticket resolution time (minutes)

330.00
320.00
310.00
300.00
290.00
280.00
270.00
260.00
250.00
0 20 40 60 80 100

a. Critically evaluate this graph and explain whether it can be used to answer the company’s
question. (4 marks)

A simple linear regression model is fitted to the same data to test whether the division becomes
more efficient as the share of employees working from home increases. The model used is:

𝑡𝑖𝑐𝑘𝑒𝑡 𝑟𝑒𝑠𝑜𝑙𝑢𝑡𝑖𝑜𝑛 𝑡𝑖𝑚𝑒! = 𝛽" + 𝛽# 𝑆ℎ𝑎𝑟𝑒𝑊𝐹𝐻! + 𝑢!

b. Write down the null and alternative hypothesis that should be tested in this case.
(2 marks)
c. Explain the risks of type I and type II errors in this scenario. (4 marks)

The HR director wants to explore this possibility in more detail so she administers a questionnaire
among a sample of the customer service division employees (there are 350 in total) to identify
their willingness to switch completely to working from home.

d. Explain two possible methods of sampling that the director can employ in this situation,
clearly describing the advantages and disadvantages of both methods. (6 marks)
 e. Describe two types of survey errors that may occur when the HR director carries out the
survey. (4 marks)
(Total 20 marks)

Question 2
In tough economic times, the business staff at magazines are challenged to sell advertising space
in their publications. Thus, one indicator of a weak economy is the decline in the number of “ad
pages” that magazines have sold. An economic research thinktank decides to test the impact of
COVID-19 on the economy using this indicator by collecting information on the number of ad
pages found in the December 2019 and December 2020 issues of 20 Sri Lankan magazines. The
sample average number of ad pages in a magazine in 2019 was 20 whereas the sample average
number for 2020 was 13.
a. Explain why it is insufficient to only compare the two sample averages to reach a
conclusion about the possible economic decline from 2019 to 2020. (4 marks)
The research assistant (RA) in charge of the analysis isn’t sure which statistical test should be
used and ends up running all possible tests using a statistical software. The output from those
tests are given below.
Table Q2

Test One-tailed p- Two-tailed p-

value value
T-test assuming unequal variances 0.04 0.08
T-test assuming equal variances 0.02 0.01
F-test for equal variances 0.23

b. Explain which statistical test(s) the assistant should consider, stating the appropriate null
and alternative hypothesis for each appropriate test. Based on the output in Table Q2,
what should the manager conclude? (6 marks)
The RA then realizes that he has data on the number of ad pages in 2019 and 2020 for the same
set of 20 magazines.
c. Explain why related populations data is preferable to data from two independent
populations, making specific reference to this context. (6 marks)

d. What do you think are the limitations of this analysis for assessing the possibility of an
economic decline? Explain your answer. (4 marks)

(Total 20 marks)
Question 3
Two professors examined the impact of team diversity on the effectiveness of teams. The
researchers studied 100 randomly selected teams across 100 organizations. For each of the teams
studied, the researchers collected information on team performance, diversity, meeting frequency,
and culture of inclusivity in the organization. Each of these aspects were then scored on a scale of
0 to 100, where 100 represents the highest rating. For example, a team that is more diverse in
terms of gender and ethnicity scores higher than a more homogenous group. Similarly, an
organization with a more inclusive culture scores higher than an organization that does not. Many
different regression models were explored, each using the team performance score as the
dependent variable. The output from three models are given below:

Model 1:
Coefficient p-value
Intercept 50.8 0.003
Diversity 5.9 0.045
R-square 0.43

Model 2:
Coefficient p-value
Intercept 51.3 0.001
Diversity 4.6 0.013
Inclusive culture 3.7 0.022
R-square 0.66

Model 3:
Coefficient p-value
Intercept 50.4 0.001
Diversity 4.5 0.024
Inclusive culture 3.5 0.022
Meeting frequency 1.3 0.110
R-square 0.68

a. Explain two advantages of multiple linear regression over simple linear regression.
(2 marks)
b. The coefficient on diversity changes from 5.9 in Model 1 to 4.6 in Model 2 following the
inclusion of the inclusive culture measure. Explain why this is the case. (4 marks)
c. Focusing on Model 3, test whether each of the explanatory variables has a significant
impact on team performance. (6 marks)
d. Which of these three models do you think is the best predictor of team performance?
(3 marks)
e. The researchers use Model 3 to conclude that team diversity has a positive impact on
team performance. Critically evaluate this claim. (5 marks)
(Total 20 marks)