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Family Name: Muhammad Talha
Given Name: Muhammad Talha
Student Number:
Lecturer’s Name: Matt Maccullum
Subject Name: Business Statistics
Assignment Title: Analysis of Dataset to Evaluate Business Need
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XYZ company intends to launch two visions of a laptop and looking for a business feasibility
report for a successful selling rate. For which a research was conducted to find out the solutions to
the following questions:
1. Which region? Region A (A) or Region B (B)
2. How much would you pay for version 1?
3. How much would you pay for version 2?
4. Would you pay more for version 1? Yes (y) or No (n)
Findings:
Here region A refers to be inside of walls of Sydney whereas region B refers to area outside the
Sydney. A survey was conducted and different opinions from the potential customers was
recorded. For which the details are as follows:
For the region A it was found that mostly (75%) people are not willing to buy version 1 and rest
of the people (25%) who are willing to buy the version 1 they are willing to pay $1133 for the
same version. If average of the price will be calculated for all the samples, it will show people are
only willing to pay $1133 for the version 1. As shown below;
xbar1 xbar2 s1 s2 n1 n2
877.111 1133 54.4036 47 18 6
Table 01: for Region A and how much people would pay for the version one.
Comparatively if we have a look at the region B the findings are as follows;
xbar1 xbar2 s1 s2 n1 n2
896.733 1129.18 53.7554 81 15 11
Table 02: Region B and How much they would pay for version 1.
For region B it was found around 58% people are not willing to buy version 1, and rest of 42% are
willing to buy on an average price of $1129 of version 1 laptop.
In both cases it has been seen that majority of people from both regions are not willing to buy
version 1 but who are willing to buy they can pay higher for that. Which are around 34% and
people inside the Sydney or outside the Sydney are willing to pay almost same price around $1131.

If the relationship between the both quantitative variables is observed, results are different, as
shown below:

sample size 50

sample Slope -1.009058873

sampe intercept 1979.339497

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 R square 0.988011663
standard error of
slope 0.016043323

test stat of slope -62.8958768

two sided p-value
for slope 8.94924E-48
To calculate the p-value H0:population slope =0 is
assumed to be true
since the test is two sided H1 is H1:population slope
≠0

As its slope is negative and it could be taken as an inverse relationship which means if the people
of region A are willing to pay more for version 1 the same time people of Region B are not and
vice versa. P-value is also higher than 0.05 which shows the difference of opinion of both regions’
people.

Which region is going to pay more for the version 1 and findings are as under:

n y total
A count 18 6 24
A% 75.00% 25.00% 100.00%
B count 15 11 26
B% 57.69% 42.31% 100.00%

As the summarizer shows, only 25% people from the region A are willing to pay more for the
version 1 comparatively 42.31% people from region B are willing to pay more for version 1. It
clearly demonstrates that people in B region are willing to pay more. Further calculations for
understandings are as follows:

phat1 -
n1 n2 phat 1 phat 2 phat2
24 26 0.25 0.4230769 -0.173077
Estimate of the difference between sample proportions
-0.17308

standard error of estimate test stat two sided pvalue

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 0.134092 -1.290728894 0.1967977
To calculate the p-value H0:p1=p2 is assumed to be true
since the test is two sided H1 is H1:p1≠p2

95% Confidence interval has been calculated as well to find out would you pay more for the
version 1 or not. Findings are as follows:
95% Confidence Interval

Mean 972.2653061
Standard Error 18.65577858
Median 945
Mode 905
Standard Deviation 130.5904501
Sample Variance 17053.86565
Kurtosis -0.725517714
Skewness 0.626073748
Range 498
Minimum 791
Maximum 1289
Sum 47641
Count 49
Confidence Level(95.0%) 37.50995684
Lower Case 934.7553493
Upper Case 1009.775263

There was a claim that people would pay more than $1000 on average for version one which seems
to be false after calculating the Test stat for both versions. Findings are as under:

how much would they pay for version 1?

Mean 969.16
Variance 17187.97388
Observations 50
Pearson Correlation -0.993987758
Hypothesized Mean
Difference 1000
df 49
t Stat -27.66922766
P(T<=t) one-tail 7.21724E-32
t Critical one-tail 1.676550893
P(T<=t) two-tail 1.44345E-31

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 t Critical two-tail 2.009575237

It can be seen from the means value that people are not willing to pay more than $969 on average
which is for sure lower than $1000. It rejects the claim.

There is no significant relationship between regions and how much they would pay for the version
one but slightly. P values are as under

Estimate
xbar1-xbar2
-53.9936
standard error of estimate xbar1-xbar2
36.5654
t test stat df two sided pvalue
-1.47663 47 0.14644
To calculate the p-value H0:μ1=μ2 is assumed to be
true
since the test is two sided H1 is H1:μ1≠μ2

P-value is greater than 0.05 which clearly shows that the claim (hypothesis) is false and not proved
by values.

Once again a claim (hypothesis) was tested based on the findings and it was observed the pvalues
is greater than 0.05 showing no relationship between the variables. Calculations are as under:

phat phat1 -
n1 n2 1 phat 2 phat2
-
24 26 0.25 0.4230769 0.173077
Estimate of the difference between
sample proportions

-0.17308

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 standard
error of
estimate test stat two sided pvalue
-
0.134092 1.290728894 0.1967977
To calculate the p-value H0:p1=p2 is assumed
to be true
since the test is two sided
H1 is H1:p1≠p2

A pvalue of 0.19679 can be seen, although its slightly better than the previous claim but it doesn’t
make any difference between the regions and would they spend more for version 1 o not.

Other Variables effecting:

As a laptop selling or manufacturing company only region is not a single variable to determine the
success or failure of a product into market. There could be bundle of variables to be analyzed
before introducing a new product.
1. Purpose of a customer: A customer might want a laptop to fulfill one’s purpose. Like some
want a laptop with more specifications due to nature of work.

2. Profession of a customer: a customer profession is highly recommended as people have

different needs, a student might need a laptop with basic specifications and cheaper while
a business man needs something highly secure like macbooks and a freelances will go for
highly specified laptop to install required software’s.

3. Gender: research should be gender based as likes and wants of males and females are
different. Females might like another version than males due to colours, designs etc. its
quite possible version 1 or version 2 would be preferred by a specific gender.

4. Income Level of Customer: while conducting a research income level of the samples should
must be taken into account because people spend what they earn. Different earnings mean
different spending patterns and budgets effecting the purchasing power of people. People
with higher income can pay more for version 1 but lower income people are not easily
ready to pay more.

5. What people want: although research doesn’t have a concern with this right now to know
what people want but having an intelligence about people wants enables the company to
launch products that exactly people needs. Business is always successful when it fills a
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 niche and asking people about their needs will enable you to fill the niche and advantage
over your competitor as well.

Lurking Variables:

A research is always carried out based on the different variables and their relationship between
each other. In this case on variable is dependent and other is independent variable which means if
one variable changes it effects the results. But in this way there are some other variable which are
not under consideration and effecting the dependent variable and results of a study, such variables
are called “lurking variables”. In statistical models, the error term explains lurking variables that
affect the process. To discover lurking variables, you must take the time to understand your data
and the important variables that can affect a process. You can also create a plot of the data to look
for non-linear trends that can identify the presence of lurking variables.
For example, in case of our research we are determining the results with two variables, one is
region dependent on the variable “would people spend on a two versions of laptop or not” an
independent variable. But there are lurking variables which may affect the results such as, customer
income level, gender, technology gap, and profession. These variables may change the results
unexpectedly.
Importance of lurking variables:

As explained luring variables can change the outcomes and results of research leading wrong
decision making which is not efficient and even effective. There are always different kinds of
forces effecting the business and its productivity like, environmental forces, governmental
legislation, consumer taste, competitor etc. in such cases a perfect study and research means
everything before any decision in business. Efficiency and effectiveness in business is everything
and it can be achieved only when decisions are always right and decisions are perfect when
research behind those decisions is perfect. For a perfect decision consideration of lurking variables
is necessary.
Business Repot:
A research was conducted to evaluate the needs and spending pattern of the potential customer
before launching the two different versions of laptops. In the research three variables were taken
into consideration which are:
1. Region (A & B)
2. How much people will pay for each version?
3. Would people pay more for version 1 o 2
Variable 1 is a dependent variable and changes with the change in opinion of people and their
spending patterns. A thorough analysis was taken to find the outcomes and relationship between
the variables.
Descriptive statistical techniques were used to conclude the best possible results and findings. In
region A which includes people living inside the Sydney only 34% respondents are willing to pay
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for version 1 and the average price they are willing to pay is $1133. Comparatively the people of
region B which includes the people from outside Sydney are willing to pay $1129 for version 1
and percentage if potential buyers is 42% slightly higher than people of Region A. result on the
above mentioned variables people from both regions are not much willing to pay more for version
1 and if they are paying they will only pay and average price upto $1130 on average.
Important factor to be taken into consideration is “lurking variables” which are effecting the actual
outcomes of study and can lead to misleading while decision making. Income level of target
market, gender based differences and choices may affect the results and different outcomes.
Without consideration of such factors success chances are lower.
As per the discussion and findings above its recommended to company to select a target market
after analyzing the potential customer considering all associated factors. All the claims and
hypothesis gone wrong to higher pvalue between the variables. If company launches version 1 in
region A it should be lower in quantity as per potential customers found in research. Still
considering lurking variable first would be beneficial.

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