BUS105e

Statistics

Assignment 2 – Group-based Assignment

July 2015 Presentation

BUS105e Assignment 2

Group-based Assignment

This assignment is worth 30% of the final mark for BUS105e Statistics.

The cut-off date for this assignment is 26 August 2015, 2359 hrs.

This is a group-based assignment. You should form a group of 3 members from your
seminar group. Each group is required to upload a single report to MyUniSIM via your
respective seminar group. Please elect a group leader. The responsibility of the group leader
is to upload the report on behalf of the group.

It is important for each group member to contribute substantially to the final submitted work.
All group members are equally responsible for the entire submitted assignment. If you feel
that the work distribution is inequitable to either yourself or your group mates, please
highlight this to your instructor as soon as possible. Your instructor will then investigate and
decide on any action that needs to be taken. It is not necessary for all group members to be
awarded the same mark.

___________________________________________________________________________

Cupcakes Distribution

CupCakesSG.com is a confectionary business specializing in cupcakes. They have opened

retail outlets in many shopping and neighbourhood centres. Most of their revenue comes from
the sale of cupcakes from their retail outlets. They occasionally cater to parties and events.
They have opened a new outlet in Jurong East one year ago. However, their revenues are less
than those of their nearest outlet in Clementi. It is in similar neighbourhood location and has
approximately the same space.

The general manager, Mr Aaron Kan, is concerned that the revenue is too low. The
management will like to close this outlet and open at a different location but Mr Kan feels he
can improve this outlet’s business. He identified a few possible reasons namely the number of
flavour offerings and customer satisfaction. Jurong East outlet only offers six of the ten
flavours available whereas Clementi outlet offers all ten. He also feels that customer
satisfaction is lower at Jurong East outlet.

Mr Kan engaged you to analyse data of the past one year (see file cupcakessg_data.xlsx) and
identify factors he needs to address to improve business. Samples were taken each day to
estimate for that day.

Listed below are the codes used for outlets, flavours and satisfaction in the data file:

SIM UNIVERSITY Assignment 2 – Page 2 of 4

BUS105e Assignment 2

Cup Cake Flavours Overall Satisfaction

Flavour  Satisfaction 
Number Flavour Code Satisfaction 
1 Vanilla 1 Poor
2 Chocolate 2 Below satisfactory
3 Strawberry 3 Above satisfactory
4 Chocolate Chip 4 Good
5 Mango 5 Excellent
6 Blueberry
7 Durian Outlet 
8 Pandan
9 Banana Outlet Code Outlet
10 Mixed Fruit 1 Jurong East
2 Clementi

Question 1

Recommend a suitable sampling method and explain how you could collect data for this
business. Is the variable Satisfaction a nominal or ordinal variable?
Hint: Can the choices be ranked?
(4 marks)

Using software like Excel, describe at least two (2) variables for each outlet location. You
should have at least two (2) summaries and two (2) charts. Explain why you chose those
variables, summaries and charts. What are your preliminary observations?
(6 marks)

Question 2

(a) State 95% confidence intervals of revenue for the Jurong East and Clementi retail
outlets separately. Interpret these confidence intervals. With these findings, is Mr Kan
correct in reporting that the revenue in Jurong East retail outlet is lower than that of
Clementi outlet?
(10 marks)

(b) Discuss the key assumption(s) you have made in constructing these confidence
intervals. Is (are) this (these) assumption(s) reasonable?
(4 marks)

(c) Will your decision in (a) change if you use 99% confidence intervals? What other
factors will affect the width of the confidence interval? Explain the effects of
changing these factors.
(6 marks)

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BUS105e Assignment 2

Question 3

Execute appropriate tests of hypothesis to determine if the mean number of cupcakes sold in
the Jurong East outlet is significantly lower than that of the Clementi outlet. With these
preliminary findings, can Satisfaction be a possible cause?

You should include the following:

(a) For a test of the difference in the mean numbers of cupcakes sold, state the null and
alternative hypotheses and explain how you develop these hypotheses.
(5 marks)

(b) Interpret the outputs from your software for an appropriate hypothesis test with α =
0.05. List the test statistic you use for this test. Explain your decision criteria. Does
the sample data support the hypothesis that the number of cupcakes sold in the Jurong
East outlet is lower than that of the Clementi outlet? What is your conclusion?
(15 marks)

(c) Discuss the assumptions you have made in performing the hypothesis test? Are these
assumptions reasonable for this case? Please provide explanation/s to substantiate
your view.
(9 marks)

(d) Explain how you would conduct hypothesis testing on satisfaction rating to validate
Mr Kan’s claim. You are not required to conduct the actual test. However, you need
to do some research on hypothesis test for data which are not with ratio scale.
(6 marks)

Question 4

The CEO Mr Hansen sent Mr Kan a news article titled “Statistics can lie” which is about how
statistics has been used to mislead. Highlight three (3) possible concerns in business or
statistical aspects regarding the approach used here.
(12 marks)

If your group has a free hand on the project, what would be your recommendations for the
measurement, sampling, and analysis of the problem in question?
(8 marks)

Keep your answer within 400 to 500 words (indicate your word count).

Question 5

In about 300 words (indicate your word count), provide an executive summary of your
analysis and findings on this matter to CupCakesSG.com.
(15 marks)

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SIM UNIVERSITY Assignment 2 – Page 4 of 4