Problem Statement
In hopes of increasing the customer count in their stores, the Allsup’s franchise has reduced prices on their coffee beverages. Based off a 34-store sample that is an almost exact mirror of all 316 stores, over the following four weeks, the chain has a gross margin of 42% and has increased their average customer count to 967. That being said, based off the statistical evidence found in hypothesis testing, we can concur that reducing the prices of coffee beverages has proven to be a beneficially effective strategy to help bring customers into Allsup’s stores.
Methodology
First, as seen in Figure I, I organized the initial and current coffee prices as well as the differences to see if there was any specific correlation that …show more content…
Using the ‘Critical Values of t’ table found in Business Statistics: A First Course, I found where the degree of freedom value met with the alpha level (Sharpe, 2017, p. 523). This resulted in a value of approximately 1.6924. Finally, I drew a one-tailed graph with the mu, alpha level, standard t value, and critical t value. Based off the location of the ‘standard t value’ in comparison to the ‘critical t value’, I saw that the standard value fell within the area where I would be able to find my …show more content…
In addition, the sample size, which is the experimental 34 stores out of the 316 total store locations, was also provided. After learning the sample size that I was would be using, I found the degrees of freedom, 33, by subtracting the sample size, 34, by one; solving for the degrees of freedom is pertinent in solving for the ‘critical t value’ factor. After plugging my data into the ‘t value’ formula, as I mentioned in the methodology, my result was a value of approximately 1.9932. As mentioned in the methodology, I found where the degree of freedom value, 33, met with the alpha level, .05 as seen in Figure IV. This resulted with a value of approximately 1.6924. Considering that our initial customer count and mean was 900 and our goal and/or target is 967, I chose to use a one-tailed graph in order to direct our outcome towards the 967 goal (Hypothesis Testing, 2018). That being said, based off the location of the ‘standard t value’ in comparison to the
In hopes of increasing the customer count in their stores, the Allsup’s franchise has reduced prices on their coffee beverages. Based off a 34-store sample that is an almost exact mirror of all 316 stores, over the following four weeks, the chain has a gross margin of 42% and has increased their average customer count to 967. That being said, based off the statistical evidence found in hypothesis testing, we can concur that reducing the prices of coffee beverages has proven to be a beneficially effective strategy to help bring customers into Allsup’s stores.
Methodology
First, as seen in Figure I, I organized the initial and current coffee prices as well as the differences to see if there was any specific correlation that …show more content…
Using the ‘Critical Values of t’ table found in Business Statistics: A First Course, I found where the degree of freedom value met with the alpha level (Sharpe, 2017, p. 523). This resulted in a value of approximately 1.6924. Finally, I drew a one-tailed graph with the mu, alpha level, standard t value, and critical t value. Based off the location of the ‘standard t value’ in comparison to the ‘critical t value’, I saw that the standard value fell within the area where I would be able to find my …show more content…
In addition, the sample size, which is the experimental 34 stores out of the 316 total store locations, was also provided. After learning the sample size that I was would be using, I found the degrees of freedom, 33, by subtracting the sample size, 34, by one; solving for the degrees of freedom is pertinent in solving for the ‘critical t value’ factor. After plugging my data into the ‘t value’ formula, as I mentioned in the methodology, my result was a value of approximately 1.9932. As mentioned in the methodology, I found where the degree of freedom value, 33, met with the alpha level, .05 as seen in Figure IV. This resulted with a value of approximately 1.6924. Considering that our initial customer count and mean was 900 and our goal and/or target is 967, I chose to use a one-tailed graph in order to direct our outcome towards the 967 goal (Hypothesis Testing, 2018). That being said, based off the location of the ‘standard t value’ in comparison to the