Correlation

    Exercise 6Medical records show strong positive correlations between the age of a patient, the number of days the patient stays in the hospital, and the total cost of the visit.a) Does this mean more efficient management practices that reduce the length of hospital stays could reduce the age of patients? Explain. b) Does this mean such practices could reduce the total cost of the hospital visits? Explain.Exercise 9a) Rumors at the company suggest that the longer it takes to hear the results, the lower the score because managers may be postponing a difficult decision with the employee about poor performance. Do the data support this concern? b) Top management is concerned about rumors that scores were unfairly bumped up a few points for many employees to help them get raises that weren’t justified by their performance. Is there any evidence of this?Exercise WK3_X1A manager of a large chain of nationwide sporting goods stores would like to know which of the following factors has the strongest link to sales: Age (median age of customer base in years), HS (percentage of customer base with a high school diploma), College (percentage of customer base with a high school diploma), Growth (annual population growth rate of customer base over the past 10 years), and Income (Median family income of customer base in dollars). Looking at the file WK3_X1.xls what do you conclude? The data stored in the file WK3_X1.xls are the monthly sales totals from a random sample of 38 stores in the franchise. All stores in the franchise and thus within the sample, are approximately the same size and carry the same merchandise. The county, or in some cases the counties in which the store draws the majority of its customers is referred to here as the customer base. For each of the 38 stores, demographic information about the customer base is provided. The data are real, but the name of the franchise is not used, at the request of the company. Chapter: RegressionExercise 9Sales figures for each sales associate in a large company are calculated for the current year and the last year. Last year the average sales per associate was $500,000 and the average for this year is about the same. True or false and explain briefly: the regression effect says that the number of associates who sold over $1 million in the current year should be somewhat less than the number who sold over $1 million last year.Exercise 13a) Give a managerial interpretation for the coefficients 3 and .9.b) A particular company has a value of 15 on the measure of future growth. Its PE ratio is 4.5. What would you conclude about this company’s PE? Briefly explain.c) Since 13.2 is greater than .9, can you conclude the PE ratio has a stronger relationship to dividends than future growth? If not, what would you need to know to conclude which variable has a stronger relationship to the PE ratio? Briefly explain.Exercise WK3_X2Management of a soft-drink bottling company wants to develop a method for allocating delivery costs to customers. Although one cost clearly relates to travel time within a particular route, another cost variable reflects the time required to unload the cases of soft drink at the delivery point. A sample of 20 deliveries within a territory was selected. The delivery times (in minutes) and the number of cases delivered were recorded in the file WK3_X2.xls. An analyst computes the delivery time per case delivered and averages these to get 0.33 minutes. Using this he gives an estimated delivery time of 50 minutes for 150 cases to be delivered. Is this a reasonable delivery time? Explain why or why not. Looking at the data in the file, can you give a better estimate?