BUSSINESS STATISTICS

Group-6
Arshiya Singh
Chahana Jakhar
Komal Sharma
Mishapreet Kaur
Priyam Sikaria
Question 7.22
The amount of time a bank teller spends with
each customer has a population mean ,µ ,of
3.10 minutes and standard deviation, ơ, of
0.40 minute. If you select a random sample
of 16 customers.
a)what is the probability that the mean time spent per customer is at least 3 minutes?

Given Data,
a.µ=3.10
ơ=0.4.
n=16
So,
(3-3.10)0.40/4
=(-)0.10/0.10
=(-)1
Checking the Z table for the critical value of (-)1
we get 15.87%
For mean >=3,
100-15.87=84.13%
b) there is an 85% chance that the sample mean is less than how many minutes?

For 85% confidence level, Z=1.04 (aprox.)

Therefore,
1.04=(X-3.10)0.40/4
X=3.204
Therefore there is an 85% chance that the
sample mean is less than 3.204 minutes
c) what assumption must you makes in
order to solve (a) and (b)?

We assume that the population is normally

distributed, hence implying that it is
symmetrical and has an infinite range.
d) if u select a random sample of 64 customers, there is an 85% chance that the sample mean is less than how
many minutes?

N=64
Z(at 85% confidence level)=1.04
ơ=0.40
µ=3.10
 
X=3.152
Therefore, on selecting a random sample of
64 customers at 85% confidence interval the
sample mean is less than 3.152 minutes
 Ques.:12.75

Can demographic information be helpful in

predicting sales at sporting goods stores? The data
stored in the file ‘Sporting’ are monthly sales totals
from a random sample of 38 stores in a large chain
of nationwide sporting goods stores. All stores in
franchise, thus within a 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 data are real, but the name of the
franchise is not used at the request of the company.
 
a.) Construct a scatter plot, using sales as
dependent variable and median family income as
the independent variable. Discuss the graph.

• Trend-line positively sloped

• ∴ Positive relationship between sales and family income
b)Assuming a linear relationship, use the least–
squares method to compute the regression
coefficients b0 and b1.
c) Interpret the meaning of the Y intercept, b 0 and
the slope,b1, in this problem.
 The Y intercept, b0 = 299876.8059
It means that if the family income is zero
then sales will be 299876.8059 units.

 The slope, b1 = 39.1697

It means for every 1 unit rise in family
income, sales will increase by 39.1697 units.
d)Compute the coefficient of determination, r 2,
and interpret its meaning.

The above value of r2 means that 14.72% variation

in sales is explained by Family Income, the rest
85.28 % by other factors.
e) Perform a residual analysis on your results and
determine the adequacy of the fit of the model.
 The residual analysis consists of four tests, the test

for linearity, independence, normality and equal

variance.
◦ Linearity: Referring to the residual values of ‘Residual
Output’ table in sheet I, one can clearly observe that the
residuals appear to be evenly spread above and below zero
for different values of X. Thus the linear model is
appropriate.
◦ Independence: Since the data is collected during the same
time period, one does not need to evaluate the independence
assumption.
◦ Normality: The residuals have been tallied into a frequency
distribution.
◦ Equal Variance:There do not appear to be major differences
in the variability of the residuals for different X values. Thus
one can conclude that there is no apparent violation in the
assumption of equal variance at each level of X.
Normality
Bin Frequency
-1600000 0
-1400000 1
-1200000 2
-1000000 1
-800000 3
-600000 4
-400000 5
-200000 2
0 0
200000 4
400000 5
600000 2
800000 0
1000000 3
1200000 2
1400000 3
1600000 0
1800000 1
More 0
38
Equal Variance
Residuals

2000000

1500000

1000000

500000
Residuals

0
15000 20000 25000 30000 35000 40000 45000 50000 55000

-500000

-1000000

-1500000

-2000000
f) At the 0.05 level of significance, is there
evidence of a linear relationship between the
independent variable and the dependent variable?
g) Construct a 95% confidence interval estimate
of the population slope and interpret its meaning.

 Thus, we obtain the range

7.2994 ≤ b1 ≤71.040

 One can estimate with 95% confidence that the

population slope is between 7.2994 and 71.0400.
 Since both these values are above 0, one concludes
that there is a significant linear relationship
between sales and the family income.
Thank You