CASES FOR MBA 501

Money Supply and Interest Rates

Sources
Case: Bryant and Smith
Data: Money.jmp
JMP Instructions
To estimate a simple linear regression model, select Analyze and then Fit Y by X. Enter the
dependent and independent variables of interest. Then click on the red triangle above the
scatterplot and select Fit Line.
Assignment
Run a regression of PRIME on M1. Repeat this exercise for all pairs of money supply and
interest rate variables in the data set. Use simple linear regression only. In the technical appendix,
present the estimated regression equations, t-statistics, and R2s. Label the statistically significant
coefficients as follows: *** if the p-value < 0.01, ** if the p-value < .05, or * if the p-value <
0.10. Interpret the magnitudes and significance of the estimated slope coefficients and the R2s.
Address the following questions in your executive summary:
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Which interest rates and money supplies have statistically significant relationships?
Are some interest rates more responsive to certain measures of money supply than
others?

The Gotham Giants

Sources
Case: Schleifer and Bell
Data: Gotham.jmp
JMP Instructions
Although they are qualitative in nature, code dummy variables as continuous in JMP. Otherwise,
you will obtain unconventional results.
I created several dummy variables that will be useful for your analysis. For example, I recoded
the variable Month, which ranges from 4 (April) to 9 (September) as a pair of dummy variables:
April-May and June-August. The former takes on the value 1 if the game was played in April or
May and the value 0 otherwise. The latter takes on the value 1 if the game was played in June,
July, or August and the value 0 otherwise. Collectively, the reference category for these two
dummy variables is September. Other dummy variables are defined in a similar fashion. Note that
there are two sets of groupings for opponents: a set of dummy variables indicating individual
opponents and a set of dummy variables indicating groups of similar opponents. Do not use both
sets of dummy variables in any one model. If you are unclear about a variable definition, click on
the box above the column and then select Edit Formula to see the variable that generates the
values in the column of interest.
To generate a correlation matrix, select Analyze and then Multivariate. Highlight the variables of
interest. Then select Y and Ok.
To estimate a multiple regression model, select Analyze and then Fit Model. Enter the dependent
and independent variables of interest and click on Run.
Assignment
Assume that the TV schedule is frozen before the start of the season. Thus, it is possible that the
day of the week, the month, the time of day, the opponent, and special events (if frozen in
advance) could influence whether a game is televised. However, the temperature, the weather,
and the pitcher cannot influence whether a game is televised because these variables are not
observed when the TV schedule is made. Provide an influence diagram to help you select
variables. Label each variable as A, B, C, D, E, treatment, or dependent variable. Using only the
methods covered by the end of the last class, estimate several regression models. Present at most
two empirical specifications. Justify your selection of independent variables. Present results
tables even if you use specifications provided in the case book. Conduct a cost-benefit analysis to
assess the value of special events.
Address the following questions in your executive summary:
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Does televising games affect attendance? Explain fully.

Station WQJY would like to televise three more games in 1980 than in 1979 (at
the same $12,500 per game). Should Glasshofer agree to this deal? Explain.

How worthwhile are the special events? What policy would you recommend with
regard to special events in 1980? Explain (refer to the technical appendix for
details).

Baseball Fans: Who are the Gotham Giants? What is the real radio station? Who are the star
pitchers? Who are opponents 1, 2, and 10?

Reyem Affiar
Sources
Case: Separate HBS Case
Data: Reyem.jmp
JMP Instructions
As in the Gotham Giants case, I created dummy variables that will be useful for your analysis.
For the look-alike analysis, you may want to sort the data. To do so, select Tables and then Sort.
Highlight the variable of interest and click on By and then Sort.
To predict the selling price of 236 Ellery Street, add one row of data by selecting Rows and then
Add Rows. Add one row to the end of the data file and fill in the information corresponding to
236 Ellery Street. Since some of the cells including the cell for Sale Price will be missing, this
observation will not contribute to the estimated regression model. After estimating the regression
model of interest (see the above instructions for The Gotham Giants), click on the red triangle in
the upper left hand corner and then select Save Columns and Predicted Values. Return to the data
table and note the new column of predicted values. The predicted value of interest will appear in
the last row of this new column.
Assignment
Look-alike Analysis: Identify a group of condominiums with characteristics similar to 236 Ellery
Street. The size of this group will depend on your look-alike definitions. Using only this group of
condominiums, guess the selling price of 236 Ellery Street.
Regression Analysis: Using only the methods covered by the end of the last class, develop and
estimate regression models of selling price. Present at most two empirical specifications. Justify
your selection of independent variables. Briefly discuss which variables significantly influence the
selling price. Indicate the signs of these coefficients and whether the signs are intuitive. Based on
one of these models, predict the selling price of 236 Ellery Street.
Address the following questions in your executive summary:
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Discuss the relative merits of look-alike analysis and regression analysis in the
context of real estate appraisals in general and in this case in particular.
What other variables not included in the data set might improve the regression
model=s predictive power?
What price should Reyem offer? Explain fully (refer to the results in the technical
appendix). What information about Reyem might help you address this question?

Barbara J. Key Vs. The Gillette Co. (A and B)

Sources
Case: Schleifer and Bell
Data: None
Assignment
The plaintiff=s expert presents results based on two regression models that differ with respect to
the dependent variable -- SALARY or Log(SALARY). The defense expert presents results based
on four regression models that differ with respect to the dependent variable -- again SALARY or
Log(SALARY) -- and the set of independent variables -- inclusion or exclusion of job grade
dummy variables.
Based on the evidence provided in the case, can you conclude that women suffered salary
discrimination at Gillette in the 1972-75 time frame? If so, what do the results suggest about the
extent of this discrimination? Before addressing these questions, think about which models are
the most appropriate.
In your executive summary, summarize your conclusions with regard to whether and to what
extent women suffered salary discrimination at Gillette between 1972 and 1975.
In your technical appendix, include a description of the data set (including the sample sizes), all
relevant variable definitions, and an assessment of the various models. Present an influence
diagram if it facilitates your analysis. Also explain how to interpret the coefficient on the sex
dummy in models where the dependent variable is SALARY and the multiplicative effect in
models where the dependent variable is Log(Salary). Illustrate by interpreting at least one
coefficient and at least one multiplicative effect. Also indicate how the interpretation of the
coefficient on SEX differs across models, depending on which explanatory variables are included.

Harmon Foods
Sources
Case: Schleifer and Bell
Data: Harmon.jmp
JMP Instructions
Ignore the Invalid Row Number message when reading in the data.
If you use dummy variables, remember to code them as continuous in JMP.
Note that lagged values of consumer packs and dealer allowances have already been created.
See the instructions for The Gotham Giants and for Reyem Affiar on estimation and prediction.
To obtain the results of a Durbin Watson test, click on the red triangle in the upper left hand
corner and then select Row Diagnostics and Durbin Watson Test.
Assignment
For January 1988, Harmon Foods has budgeted for 250,000 cases of consumer packs and
$100,000 in dealer allowances. What is your sales forecast for the month, assuming the budgeted
promotion figures prove correct?
To answer this question, develop a multiple regression model of sales. In addition to consumer
packs and dealer allowances, consider including a trend, seasonal effects, and lags in your model.
In your analysis, be sure to describe the data set including the sample size, clearly define all
variables used in your model, and explain why you selected these variables. Present a specific
sales forecast based on your regression model, interpret relevant coefficients, indicate which
variables are statistically significant at conventional levels of significance (10%, 5%, and 1%), and
discuss the fit of your model. Present up to three sets of results in your technical appendix but
discuss only one set of results in your executive summary.

Advertising Strategy
Sources
Case: Anderson, Sweeney, and Williams, Management Science Supplement, Chapter 2
Data: None
Assignment
See the instructions for the managerial report. In addition to providing the relevant background
and motivation, address parts #1-7 in your executive summary. Include the linear programming
model and graphical solution in your technical appendix. Clearly indicate the decision variables,
objective function, and constraints. On your graphical solution, clearly indicate the constraints,
feasible set, and optimal solution.
Production Strategy
Sources
Case: Anderson, Sweeney, and Williams, Management Science Supplement, Chapter 2
Data: None
Assignment
See the instructions for the managerial report. In addition to providing the relevant background
and motivation, address parts #1-3 in your executive summary. Also discuss the potential
implications of the 30% dealer discount on the optimal product mix. Include the linear
programming model and graphical solution in your technical appendix. Clearly indicate the
decision variables, objective function, and constraints. On your graphical solution, clearly indicate
the constraints, feasible set, and optimal solution.