Chapter 4

Question 1

The various factors that can influence the absentee rates amongst sales associates include:

Illness: All employees are entitled to sick offs and this may affect the absentee rates amongst employees.

Time of the shift (Early or Late): The highest number of absentees would definitely be from the early shift, as most employees would find it a challenge to report for the early shift as compared to the late shift.

Penalties for absenteeism: If the company has lenient penalties for absenteeism, most of the sales associates may take advantage of that.

Set targets: In cases where the employees are given set targets, most would abscond from work after achieving their targets.

i) The country’s business policies: A country’s monetary and fiscal policies directly influence a company’s profitability.

ii) Availability of cheap labor: Most businesses will target areas where the cost of production is low in order to maximize profits

iii) Ease of setting up the business: In cases where the process of setting up a business in terms of requirements is not cumbersome, more new businesses will be set up.

iv) Investment in infrastructure: A country’s investment in infrastructure will attract more investors, as it will lower the cost of doing business in the given country.

i) The season: Skiing is a seasonal sport, this therefore means that there are certain times during the year in which data may not be quite as easy to come by.

ii) The level of disclosure allowed by the resorts: Some resorts may opt not to disclose in full in order to avoid loss of clients, this may affect the data collected in terms of severity of injuries.

Question 2

i) The community in question must be identified and a definite target sample size determined

Question 4

Current storage density 1.5 TB

Current transistor count

4.6 Case Study: Models of Advertising Effectiveness

Business Problem

Question 1

This sketch suggests a direct relationship between sales and advertising seconds, whereby the rate of sales is directly proportional to the amount of advertising hours. The more the advertising time, the more the sales.

2. Sketch an alternative relationship between the number of seconds of daily advertising

and sales and write a brief description explaining this relationship.

Sales

Ad time in Seconds

In this case, initially sales are directly affected by the number of advertising minutes, with sales increasing with every increase in advertising time, until it (sales) gradually begins to slow down and finally reaches a plateau phase, where regardless of how much more advertising time is added, sales does not change.

3. The following table gives data from the past five TV advertising campaigns.

Advertising Time Sales (in 1000 units)

30 9

90 22

120 34

150 26

180 37.5

a. Plot the data and sketch a model that you think adequately represents the

data.

The best model would be a linear regression model.

b. Using your model, quantify the relationship between advertising time and

sales.

The relationship is a direct one, where sales increases with increase in advertising seconds.

c. Use your model to predict the number of units sold for 180 seconds.

38,500 units.

d. What would you expect sales to be for 300 seconds of advertising time? Do

you have any reservations about this prediction?

The prediction would be about 65000 unit sales for 300 seconds of advertising time. This in my opinion is not realistic, as it suggests that there would be no slowing down of sales, or even a ceiling for the amount of sales. In addition it also suggests that there are no other factors affecting sales.