Questions and Answers of Business Statistics In Practice

WestJet Airlines is able to keep fares low in part because of relatively low maintenance costs on its airplanes. One of the main reasons for the low maintenance costs is that WestJet flies mainly one
1. Explain why we conduct multiple comparison tests between groups.2. What can be done to handle multiple comparison tests when the sample sizes are unequal?
1. Explain in your own words what a blocking variable is.2. Consider Problem 11.12. Provide three examples of blocking variables that can be used for that particular experiment.Data from problem
Is there a difference in the family demographics of people who stay at hotels? Suppose a study is conducted in which three categories of hotels are used: economy hotels, modestly priced chain hotels,
1. When are factorial designs used?2. Describe a business research situation where a factorial design application is possible.3. Draw a 2 × 3 factorial design graph where interaction is present.
Determine the value of the correlation coefficient, r, for the following data. c 4 6 У 18 12 7 11 14 13 8 7 17 7 21 4
In statistics, the phrase “correlation does not imply causation” is used to emphasize that correlation between two variables does not automatically imply that one causes the other. Can you think
1. What is regression analysis?2. You know the price and sales history of a product. You need to predict the effect of next year’s price on sales. Do you think regression analysis is the right
1. What does slope mean in regression analysis?2. What does intercept mean in regression analysis?
1. What are residuals in regression analysis?2. Why is it important to analyze the residuals?3. How would you identify nonlinear residuals?4. How would you identify heteroscedasticity using
1. What does the standard error of the estimate mean in regression analysis?2. Does the standard error of the estimate tell us anything about the predictive accuracy of the regression model? Explain
1. What is the coefficient of determination?2. How would you interpret a given value of the coefficient of determination?
Why should you check the slope and the overall model before using the sample regression model you have developed?
1. What is a confidence interval?2. A regression equation gives the value of y given the value of x. Do we then need to construct a confidence interval around predicted values?
How would you use regression analysis to predict future values? What type of data is used for this purpose?
Given below is the crude oil production (million tonnes of oil equivalent) in Canada between 1991 and 2017. Use these time-series data to develop an autoregression model with a one-period lag. Now
Given below are the Canadian Industrial Product Price Index and the Consumer Price Index (CPI) for the years 1999 to 2018. Use these data to develop a simple regression forecasting model that
The following table shows the percentage household savings rates in Canada and in the U.S. from 2003 to 2017. Use these data to develop a linear regression model to forecast the percentage change in
Given below are the monthly prices of orange juice for 24 months. Use these data to compute 12-month centred moving averages (T·C). Using these computed values, determine the seasonal effects
It seems logical that restaurant chains with more units (restaurants) would have greater sales. This assumption is mitigated, however, by several possibilities: some units may be more profitable than
Shown here are the labour force figures (in millions) for the country of Bangladesh over a 10-year period published by the World Bank. Develop the equation of a trend line through these data and use
How strong is the correlation between the inflation rate and the unemployment rate? The following data are given as pairs of inflation rates and unemployment rates for the month of May for 10 recent
People in the aerospace industry believe the cost of a space project is a function of the mass of the major object being sent into space. Use the following data to develop a regression model to
Canada’s trade balance with the rest of the world has been steadily increasing over the past several years. It is well known that the U.S. is Canada’s leading trade partner. Is there a
Is the amount of money spent by companies on advertising a function of the total sales of the company? Shown are sales income and advertising cost data for seven companies, published by Advertising
Study the following Excel regression output for an analysis attempting to predict the number of union members by the size of the labour force for selected years over a 30-year period. Analyze the
1. What is the difference between simple regression analysis and multiple regression analysis?2. What is a partial regression coefficient and how is it different from a full regression coefficient?3.
Why is it important to test the multiple regression model once it is developed? What would you test it for?
Is there a particular product that is an indicator of per capita personal consumption for countries around the world? Shown below are data on per capita personal consumption, paper consumption, fish
1. What are residuals?2. Describe what you can learn by analyzing the residuals.3. Explain the term standard error of the estimate.4. What is the coefficient of determination and what does it tell
What can we learn from the ANOVA table in a multiple regression analysis output?
1. What are influential observations? How do influential observations potentially affect the regression equation?2. Suppose you are given a multiple regression equation to predict the inflation rate
Study the residual diagnostics that follow. Discuss any potential problems with meeting the regression assumptions for this regression analysis based on the residual graphics.
Study the regression output that follows. How many predictors are there? What is the equation of the regression model? Using the key statistics discussed in this chapter, discuss the strength of the
To Table 13.1 add one more observation that happens to be a custom-built property, priced dissimilarly to other properties:Recalculate the regression equation. How did the regression model
In Figure 13.5, the coefficient of determination (R2) is determined to be 0.741. Given that it is based on a sample size of 23, what R2 would you expect, even when there is no relationship between
Assume that you get a coefficient of determination of 0.741, based on a sample size of 23, as shown in Figure 13.5. Further assume that the regression was based on 10 predictor variables. Given that
Statistics Canada produces consumer price indexes for several different categories. Shown here are the percentage changes in consumer price indexes over a period of 22 years for durable goods,
The table on the next page shows Canada’s exchange rate for US$1 for a 13-year period. Use these data and multiple regression analysis to predict the exchange rate from the different variables like
The table below shows the growth of new car dealers over a 17-year period. Use the data to predict the number of new car dealers on the basis of the amount spent on used vehicles and parts, total
Shown here are the data for y and three predictors, x1, x2, and x3. A multiple regression analysis has been done on these data. Comment on the outcome of the analysis in light of the data.
Suppose you develop a multiple regression based on 10 years of data to predict the export volume in Canada using six independent variables. You get an R2 of 0.5. How confident would you be that this
Ceapro is an Edmonton-based biotechnology company known for turning oats into beneficial products. Ceapro is the world’s only commercial manufacturer of avenanthramides, a group of therapeutic
1. What are first-order models and how are they different from second-order models?2. What is a quadratic model?3. In what context would you use the ladder of transformation?4. What is Tukey’s
1. What is an indicator or a dummy variable? Give three examples.2. How would you code a dummy variable with three categories?
1. What does the term search procedures mean in regression analysis?2. Name some commonly used search procedures in regression analysis and briefly describe them.
1. What is multicollinearity and why is it a problem?2. What procedures would you use to detect multicollinearity?
1. What kinds of situations call for the use of logistic regression?2. List three ways in which logistic regression differs from multiple regression.3. What is the main difference between simple
Dofasco Inc. was founded in 1912 in Hamilton, Ontario, by Clifton W. Sherman. Dofasco provides steel to various industries, including the automotive and pipe industries, and today is considered one
1. What is a time series? Would you say that data collected at random intervals over a number of years may be called a time series? Why or why not?2. What are the four components of time-series data?
1. What are smoothing techniques and when would you use them?2. What is the basic assumption behind naive forecasting models?3. Describe the differences between simple averages, moving averages, and
Shown here is the contribution of renewables to energy supply in Canada, shown as a percentage of the total primary energy supply. Use these data to develop an autoregression forecasting model with a
1. When you use linear regression to do trend analysis, what is the independent variable?2. How do quadratic models differ from linear models in regression analysis?
1. What are seasonal effects?2. What is the main technique used to isolate seasonality?
1. What is autocorrelation and why does it pose a problem in regression analysis?2. What statistic is commonly used to measure autocorrelation?3. Name and describe two methods by which you can
1. Why are index numbers necessary? Why can’t we compare raw numbers directly with each other?2. How do unweighted aggregate price index numbers differ from weighted aggregate price index
Following are the numbers of patents issued for Canadian research and development (R&D) by three sources: Japan Patent Office, European Patent Office, and the U.S. Patent and Trademark Office
Using the data that follow, compute the aggregate index numbers for prices of the four types of meat. Let 1995 be the base year for this market basket of goods. Items Ground beef (per kg) Sausage
Suppose the following data are prices of market goods involved in household transportation for the years 2010 through 2018. Using 2012 as a base year, compute aggregate transportation price indexes
Compute index numbers for the following data using 2006 as the base year.
Calculate Paasche price indexes for 2017 and 2018 using the following data and 2005 as the base year. Item 2005 Price 1 2 3 $22.50 10.90 1.85 2017 Price Quantity $27.80 13 13.10 5 2.25 41 2018 Price
Calculate Laspeyres price indexes for 2016 to 2018 from the following data. Use 2005 as the base year. Quantity Item 2005 1 21 6 234 2 3 17 4
Compute unweighted aggregate price index numbers for each of the given years, using 2016 as the base year. Item
Using the following data and 2017 as the base year, compute the Laspeyres price index for 2019 and the Paasche price index for 2020.
Given below are the sales (in $ thousands) of a regional department store in Canada, monthly from January 2014 through December 2018. Use time-series decomposition methods to develop the seasonal
The following table contains the annual data for carbon dioxide (CO2) emissions in Canada over a 34-year period as published by the OECD.a. Use a 3-year moving average to forecast the CO2 emissions
Shown here are the Canadian total monthly consumer price index (CPI) values for July 2016 through June 2019. Use the data to answer the following questions.a. Compute the 4-month moving average to
The OECD publishes data on inflows of foreign direct investments in different countries, including Canada, for which data are given below. Use these data to develop an autoregression model with a
The data shown here, from the OECD, show the inflows and outflows of foreign direct investments in Canada. Use these data to develop a regression model to forecast the foreign inflows by foreign
Foot Locker, Inc., is the world’s number one retailer of athletic footwear and apparel. Headquartered in New York City, the company has over 32,175 employees and 3,310 retail stores in 27 countries
1. A national drugstore chain would use the chi-square goodness-of-fit test for a particular product category to determine which of the following?a. Whether sales follow a uniform distribution
1. Under what conditions would you consider using chi-square tests?a. The data are in a categorical form.b. The data are ranked.c. The data are continuous.d. The type of data is not relevant.2. An
A study was conducted to assess the magnitude of business that Canadian border retailers were doing with U.S. residents. Forty-one shoppers in border city department stores were interviewed; 24 were
A study found that the average workweek is getting longer for U.S. full-time workers. Forty-three percent of the responding workers in the survey cited “more work, more business” as the reason
According to a recent survey, 40% of luxury car manufacturers, 12% of sports car makers, and 48% of economy auto manufacturers were planning to spend more on marketing in a certain year than in
The Canadian Real Estate Association reported in a recent year that the median price of a single-family home in Calgary is $380,737 and the median price of a single-family home in Halifax is
A particular metal part can be produced at different temperatures (in degrees Celsius). All other variables being equal, a company would like to determine whether the strength of the metal part is
Commercial fish raising is a growing industry in North America. What makes fish raised commercially grow faster and larger? Suppose that a fish industry study is conducted over the three summer
Suppose 16 people in various industries are contacted in 2020 and asked to rate business conditions on several factors. The ratings of each person are tallied into a “business optimism” score.
According to an NCR white paper, it can probably be concluded that most cashiers at high-volume stores receive little or no training on how to properly scan items. What little cashier training is
Does the male stock market investor earn significantly more than the female stock market investor? One study by the New York Stock Exchange showed that the male investor has an income of $46,400 and
Catalyst Paper is a paper manufacturer in Richmond, British Columbia. In 2018 the company was bought by Paper Excellence Canada. With a workforce of about 1,500 employees, Catalyst has a global
Study each of the following control charts and determine whether any of them indicate problems in the processes. Comment on each chart. a. b. Sample Range 125 115 105 95 85
A fruit juice company sells a plastic jug filled with 1.89 L of cranberry-apple juice. Inspectors are concerned about the consistency of volume of fill in these containers. Every two hours for three
A metal-manufacturing company produces sheet metal. Statistical quality control technicians randomly select sheets to be inspected for blemishes and size problems. The number of nonconformances per
A bathtub manufacturer closely inspects several tubs on every shift for nonconformances such as leaks, lack of symmetry, unstable base, and drain malfunctions. The following list gives the number of
Use the decision table given here to complete parts (a) through (d).a. Use the maximax criterion to determine which decision alternative to select.b. Use the maximin criterion to determine which
The Fletcher-Terry Company is a worldwide leader in the development of glass-cutting tools and accessories for professional glaziers, glass manufacturers, glass artisans, and professional framers.
The introduction of a new product into the marketplace is quite risky. The percentage of new product ideas that successfully make it into the marketplace is as low as 1%. Research and development
Use the decision table given here to complete parts (a) through (d).a. Use the maximax criterion to determine which decision alternative to select.b. Use the maximin criterion to determine which
Election results can affect the payoff from certain types of investments. Suppose a brokerage firm is faced with the prospect of investing $20 million a few weeks before the national election. They
Use the following decision table to construct a decision tree. d₁ Decision d₂ Alternative d3 $1 50 75 15 State of Nature $2 20 50 12 $3 15 20 10 S4 55∞0 -5 8 $5 1 -20 6
Suppose the probabilities of the states of nature occurring for Problem 19.5 are s1 = 0.15, s2 = 0.25, s3 = 0.30, s4 = 0.10, and s5 = 0.20. Use these probabilities and EMVs to reach a conclusion
How much is the expected monetary payoff with perfect information in Problem 19.5? From this answer and the decision reached in Problem 19.6, what is the value of perfect information?Data from
What are the four major approaches to making decisions under uncertainty? Explain the basic criterion on which each approach is based.
1. What is meant by risk?2. Explain the term expected value of perfect information.3. What is utility?
How does the expected value of sample information differ from the expected value of perfect information? Give an example of an instance where the expected value of sample information may be used.
A home buyer is completing an application for a home mortgage. He is given the option of locking in a mortgage loan interest rate or waiting 60 days until closing and locking in a rate on the day of
A CEO faces a tough human resources decision. Because the company is currently operating in a budgetary crisis, the CEO will lay off 1,000 people, lay off 5,000 people, or lay off no one. One of the
Use the following decision table to complete parts (a) through (d).a. Use the maximax criterion to determine which decision alternative to select.b. Use the maximin criterion to determine which

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