A cereal company wants to see which of two promotional strategies, supplying coupons in a local newspaper
Question:
• Sales: number of boxes sold during the first week of the company’s promotion
• Promotion Type:1 if coupons are in local paper, 0 if coupons are inside box
• Competitor Promotion:1 if main competitor is running a promotion, 0 otherwise
a. Based on all 80 observations, find (1) the difference in sample mean sales between stores running the two different promotional types (and indicate which sample mean is larger), (2) the standard error of this difference, and (3) a 90% confidence interval for the population mean difference.
b. Test whether the population mean difference is zero (the null hypothesis) versus a two-tailed alternative. State whether you should accept or reject the null hypothesis, and why.
c. Repeat part b, but now restrict the population to stores where the competitor is not running a promotion of its own.
d. Based on data from all 80 observations, can you accept the (alternative) hypothesis, at the 5% level, that the mean company sales drop by at least 30 boxes when the competitor runs its own promotion (as opposed to not running its own promotion)?
e. We often use the term population without really thinking what it means. For this problem, explain in words exactly what the population mean refers to. What is the relevant population?
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Related Book For
Data Analysis and Decision Making
ISBN: 978-0538476126
4th edition
Authors: Christian Albright, Wayne Winston, Christopher Zappe
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