BUSINESS STATISTICS I

REVIEW WEEK 9

1. Prospective new students have been accepted into MBA program a SBM ITB. One of the conditions
for admission to MBA-ITB is to have TOEFL score over 500. A prospective student named ALIFFA,
wants to know the estimated average TOEFL score of the students accepted in MBA-ITB, she asked
20 students who have been accepted, about their TOEFL score. The average TOEFL score is 550
obtained with a standard deviation of 12. Is there enough evidence to state the mean population
of TOEFL score for MBA students are higher than 550 with 99% confidence?

2. A major home Improvement store conducted its biggest brand recognition campaign in the
company's history. A series of new television advertisements featuring well-known entertainers
and sports figures were launched. A key metric for the success of television advertisements in the
proportion of viewers who “like the ads a lot”. A study of 1189 adults who viewed the ads reported
that 230 Indicated that they “like the ads a lot”. The percentage of a typical television
advertisement receiving the "“like the ads a lot” score is believed to be 22%. Company officials
wanted to know if there is evidence that the series of television advertisements are less successful
than the typical ad at a 0. 01 level of significance. Compute the p-value and interpret its meaning.

3. Continuing its monitoring of the upload speed first described in the Chapter 6 Managing Ashland
MultiComm Services case on page 273, the technical operations department wants to ensure that
the mean target upload speed for all Internet service subscribers is at least 0.97 on a standard
scale in which the target value is 1.0. Each day, upload speed was measured 50 times, with the
following results (stored in AMS9).

0.854 1.023 1.005 1.030 1.219 0.977 1.044 0.778 1.122 1.114
1.091 1.086 1.141 0.931 0.723 0.934 1.060 1.047 0.800 0.889
1.012 0.695 0.869 0.734 1.131 0.993 0.762 0.814 1.108 0.805
1.223 1.024 0.884 0.799 0.870 0.898 0.621 0.818 1.113 1.286
1.052 0.678 1.162 0.808 1.012 0.859 0.951 1.112 1.003 0.972

a. Compute the sample statistics and determine whether there is evidence that the population
mean upload speed is less than 0.97.
b. Write a memo to management that summarizes your conclusions.

4. You work in the corporate office for a nationwide convenience store franchise that operates nearly
10,000 stores. The per-store daily customer count (i.e., the mean number of customers in a store
in one day) has been steady, at 900, for some time. To increase the customer count, the chain is
considering cutting prices for coffee beverages. The small size will now be $0.59 instead of $0.99,
and the medium size will be $0.69 instead of $1.19. Even with this reduction in price, the chain
will have a 40% gross margin on coffee.

To test the new initiative, the chain has reduced coffee prices in a sample of 34 stores, where
customer counts have been running almost exactly at the national average of 900. After four
weeks, the sample stores stabilize at a mean customer count of 974 and a standard deviation of
96. This increase seems like a substantial amount to you, but it also seems like a pretty small
sample. Is there statistical evidence that reducing coffee prices is a good strategy for increasing
the mean customer count? Be prepared to explain your conclusion.