Whitehouse Gardens, Inc is a chain of home supply and gardening product stores. Last year, Whitehouse adopted the balanced scorecard (BSC) for evaluation of store and store manager performance. The BSC has helped Whitehouse to identify the critical success factors for sales and profitability. In particular, it has helped Whitehouse better understand its competitive environment and the drivers of success in that environment. On the advice of its chief financial officer, Whitehouse's board has requested the company president to conduct a study to validate the balanced scorecard. The objective of the study is to make sure that the scorecard measures being used are in fact the key measures associated with success. The following data has been obtained for the most recent quarter's results for each of the company's 30 stores, listed in order of when the store was opened (most recent is store 30). There are five district managers, each of which is responsible for six of the stores. Success in this study is measured by increase in sales of each store for the current quarter over the same quarter last year. The data below include the percentage change in sales and a portion of the measures included in the customer perspective of the company's BSC. The scorecard measures include:

1. A survey of customers; this measure is taken from a survey form that is handed to customers on a random basis as they leave the store. The customers rate the store's performance on a scale of 0 to 100, where 100 is the highest score.

2. Each district manager evaluates each store once a quarter using also a scale from 0 to 100, where 100 is the highest score.

3. The district managers have a staff that on a random basis measures the wait time in the check-out line for customers in each store. The figures shown here are the average wait times, in seconds, for the samples taken in the most recent quarter.

4. Average number of store employees who have had one or more of the company's in-house training course in the past quarter, as a proportion of total employees at the store.

Required:

1. Briefly compare the benefits of the profit center approach relative to the balanced scorecard.

2. Use regression and correlation analysis to analyze the validity of the four scorecard measures used by daisy.  What conclusions can you draw from your analysis?

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