Aj Davis Course Project Essay

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Course Project – Part B James N. Lewis Devry University’s Keller School of Business Management Applied Managerial Statistics Math - 533 Instructor: Maria Ramjerdi Date: August 17, 2014 Introduction As part of a process to determine how they can more effectively service their current customers, AJ DAVIS department store chain collected data on a sample of 50 of their credit customers. The data that was collected included: Income in $1,000’s; Household-Size; Location (Rural, Urban, Suburban); Years customer lived in their current location; and existing Credit Balances for the department store’s credit card. After an exploratory analysis was done on the data listed above, it was felt that more statistical analysis was necessary. To that end, the data was subjected to hypotheses testing including the calculation of confidence intervals to determine if the managers speculations outlined below were valid. AJ Davis’s manager speculated that: a. the average (mean) annual income of the stores customers was less than $50,000 b. the true population proportion of customers who live in an urban area exceeds 40% c. the average (mean) number of years customers lived in the current home is less than 13 years d. the average (mean) credit balance for suburban customers is more than $4300 My analyses that follow will: incorporate the seven elements of the hypothesis testing which are outlined in appendix A; utilize the sample data to test and conclude whether or not there is sufficient evidence to support the manager’s speculations. I will make several assumptions regarding the data including that the data is randomly selected from the population, and that the distribution is approximately normal. The level of significance and confidence interval that will be applied to all tests will be 0.05, and 95% respectively. To arrive at an
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