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Group-5 (Section-C)

Kishan Vora (167)

Navdeep Singh Oberoi (166)

Ankit Khullar (165)

Shikha Prasad (164)

Anurag Agarwal (163)

Rishabh Shah (162)

Submitted To:

Dr.Sandhya Makkar

Case Study

on Store24:

Increasing

Employee

Retention

INDEX

2.0 Key decisions to make …………………………………………………………………………….1

3.0 Primary Analysis ………………………………………………………………………………… 1

3.1 Parameter for analysing financial Performance…………………………………………...3

3.2 Relationship between retention(tenure) and Financial Performance ……………………. 3

3.2.1 Relationship between Profit and CTenure…………………………………. 3

3.2.2 Relationship between Profit and Mtenure……………………………………5

3.3 Relationship between Profit and Site location factors…………………………………….6

3.4 Assumptions and Limitations……………………………………………………………..7

4.0 Secondary Analysis………………………………………………………………………………..7

5.0 Conclusion…………………………………………………………………………………………8

6.0 Additional Questions and solutions related to Case Study……………………………………….. 8

7.0 Exhibits……………………………………………………………………………………………14

1

Page

1.0 Objectives of case study:

• Impact of primary drivers or site-location factors on financial performance

• Understanding of manager and crew tenure are relative to site-location factors in determining

store level financial performance

• Managers and crew effect on store performance

Whether to:

• implement a bonus program

• Introduce new training programs

• develop a career development program

• Out of chain of 82 stores of store24 company, data of 75 stores is available which is as

following:

o For each store management tenure, Crew tenure, profit and sales figures have been

provided

o Other than this, details of 9 site-locations factors have been provided

o Software to be used: Ms Excel, SPSS

• For determining relationship between dependent and independent variables following tools

can be used:

o Covariance

o Correlation

o Regression

• In this analysis, correlation coefficient will be used as using covariance is not as reliable as

using correlation or regression]

• Using regression will be problematic as it will increase complexity of problem in case of

multiple variables

2

Page

3.1 Parameter for analysing financial Performance

• Firstly, the parameter for analysing financial performance needs to be defined. In the data of 75

stores two such parameters are present: Sales and Profit.

• Correlation between these two parameters can be considered as tool to decide the parameter.

• In this project all correlation related calculations have been represented using Pearson correlation

index.

Correlations

Sales Profit

N 75 75

Profit Pearson Correlation .924** 1

Sig. (2-tailed) .000

N 75 75

• From the above table, it can be observed that there is strong correlation between sales and profit of

stores. The magnitude of the same is 0.924. Thus, increasing one variable would most probably

result in increase in other variable and vice versa.

• As exhibit 2 does not contain sales of the stores, for consistency, we will consider profit as

parameter for analysing financial performance of Store24.

Performance:

• Out of 75 stores, 7 stores does not have designated manager.

• For, getting clearer picture, we are considering two separate cases for identifying relationship

between Ctenure and Profit:

o Stores without managers

o Stores with manager

3

Page

Correlations

CTenure Profit

Sig. (2-tailed) .006

N 7 7

Profit Pearson Correlation .897** 1

N 7 7

not designated

Correlations

Profit CTenure

N 68 68

CTenure Pearson Correlation .228 1

N 68 68

designated

• Observing correlation table for, stores without managers we can observe that correlation

between crew tenure and profit is as strong as 0.897. correlation table for stores with mangers

shows correlation of 0.228 between crew tenure and profit.

• From this, we can infer that, in stores in which managers are not designated, with increase in

tenure of crew members, their skills and knowledge and management acumen also increases

which in turn increases financial performance of the store.

• Also, for stores in which managers are designated, there is no significant increase in profit

with respect to crew tenure. It can be assumed that manager’s influence may hinder crew

members professional growth in one way or another. However, this phenomenon needs to be

further analysed by Jenkins.

4

Page

3.2.2 Relationship between Profit and Mtenure:

• For this calculation only, those stores are considered in which Managers are designated.

• Range of tenure of mangers is 0-277. Moreover, Jenkins feels that, the relationship between

tenure and financial performance might not be that straight forward, as mangers with low level of

tenure may react differently from managers with high value of tenure.

• To prove this point, we will first consider all stores (68) for correlation and then consider

correlation with respect to following two cases:

o For managers having tenure greater than 30.82(median)

o For managers having tenure less than 30.82 (median)

Correlations

Profit MTenure

N 75 75

MTenure Pearson Correlation .439** 1

N 75 75

Figure 6Correlation between overall Mtenure and Profit

Correlations

MTenure Profit

MTenure Pearson Correlation 1 .333

N 34 34

Profit Pearson Correlation .333 1

N 34 34

Figure 5Correlation between Low level Mtenure and profit

Correlations

Profit MTenure

N 34 34

MTenure Pearson Correlation -.008 1

N 34 34

Figure 4Correlation between High level Mtenure and Profit

5

Page

• If we consider the overall relationship between mangers’ tenure and profit, it will show

correlation of 0.439.

• But, if we consider correlation for both above mentioned categories, interesting insights can be

observed:

o For, Managers with low tenure, the correlation index is 0.333 and for managers with high

tenure the correlation is -0.008 which can be assumed to almost no correlation

o From this we can infer that, as managers get experience their skills and knowledge

increases which shows significant impact on financial performance of the store. On the

contrary, managers with high work experience (greater than 30 moths) show almost no

correlation between tenure and financial performance as the experience does not lead to

significant increase in skills and knowledge after certain limit.

• Thus, Jenkins was right about this phenomenon

• All these factors may or may not have significant impact on financial performance of stores.

Thus, it is good to differentiate significant factors form factors which are not that significant.

• Here, we are only considering correlation of profit with site-location factors. The inter correlation

between all the site-location factors, if considered, may lead to more complexity and other

analytical tool may be required to analyse them properly.

• Following table shows correlation of financial performance with all the site location factors:

Factor Correlation Index w.r.t. Profit Factor Correlation Index w.r.t. Profit

Pop 0.431 Visibility 0.136

Comp -0.335 CrewSkill 0.16

Pedcount 0.45 Res -0.159

MgrSkill 0.323 Hours24 -0.026

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• Significant factors:

o Population, competitors, Pedestrian count and manager skill play significant role on

financial performance of a store.

o All these factors seem logical to have effect on profit. However, intercorrelation between

two factors may need to insights that are helpful in taking important decisions

• Insignificant factors:

o Visibility, Crewskill, Area type and Hours24 does not affect financial performance that

much.

o Keeping store open for 24 hours incurs cost and of that does not affect the profit , store24

should not allocate funds for such services or monitor the performance for longer duration

of time

o Setting up store in residential area instead of Industrial area does not affect the financial

performance of the store

o Before taking any decision thorough analysis of inter-correlation of site-location factors

should be done

• Data of 68 stores was available out of 75 stores. It is assumed that this sample justifies the

population parameters

• Correlation is used as a tool to identify relationship between variables instead of regression

• Intercorrelation between site location factors has not been implemented and assumed its value

to be negligible

• As this case study and the chian store24 has been popular, there are severel research based

projects for the same set of objectives

• These projects have used programs such as Minitab, R, SPSS and MS Excel for analysis and

tools such as scatter plots, corrograms, Correlation Index and regression analysis

7

Page

5.0 Conclusion

• Following insights have been generated using both primary and secondary analysis:

o There will be an increase of 761(approx.) in profit value, if the Manager’s tenure i.e.

number of months of experience with Store24, increases by one month

o There will be an increase of 945 (approx.) in profit value, if the Crew’s tenure i.e. number

of months of experience with Store24, increases by one month

o Thus, when choosing between these two factors Ctenure should be given priority over

Mtenure

o Visibility is the only factor which is consistently having insignificant correlation

o Increasing in the management tenure and crew tenure can surely boost the financial

performance but priority should be given to the stores in which managers are not

designated

o Also, the company must consider the population criteria, as it sees more profit

margin. So, they must consider this site location factors, in case of a relocation.

Management skill (0.32) and Service Quality (0.36) also puts a load on profits to

certain extent. So, the company should surely take measures of implement new career

development programs, thereby improving the managerial skills.

o Manager skills play significant role in financial performance so various workshop

programs should be implemented to improve the same

o Managers with low tenure have potential to be efficient and maximize profit with

increasing tenure

Q1. (A) In what percentage of outlets did crew personnel stay for

Outlets in which crew personal stays for more than 2 years (24 months) are 10,

Therefore, percentage of outlets where crew stayed for more than 2 years are

= 10/75= 13.33%

Outlets in which crew personal stays for less than 6 months are 26,

percentage of outlets where crew stayed for less than 6 months is

=26/75= 34.66%

Lack of career development opportunities and no omission of the skill gap through training

can be the reasons for this variation in the tenure of the crew.

8

Page

Q1. (B) What is the average crew skill and manager skill? In what way is crew

skill varying with respect to visibility? How is the manger skill varying with

respect to ped-count?

Ans. Average crew skill for the given data is 3.45 out of 5, whereas

Average manager skill = 3.63

As we can see from the above table that the Crew skill and Visibility is inversely

correlated hence change in one will have adverse effect on the other.

Manager skill and Ped-count are directly related but that too in very low value which

implies that there won’t be much variability between the two.

Q2. (A) What is an outlier? What is the significance of an outlier? Is there any outlier

present in the data given under the parameter of Pop?

Ans. An outlier is an observation point that is distant from other observations. An outlier may

be due to variability in the measurement or it may indicate experimental error. Outliers are

important to keep in mind when looking at pools of data because they can sometimes affect

how the data is perceived overall. Because if outliers are not detected and dealt properly the

analysis of data can be in insignificant manner.

9

Page

No, as seen from the box plot for the data of the population, there is no outlier present in

dataset of population.

(B). How many stores are open for 24 hours? Of all the stores which are open 24 hours,

what is the probability of stores with visibility 2?

Ans. Total no of stores open for 24 hours are 63,

Total no of stores which opens for 24 hours with visibility rating 2 are 14

Therefore, probability of stores which are open for 24hrs with visibility rating 2 is

= 14/63= 0.22

(C). In how many ways can I select 2 stores with Ped count 3? What is the probability of

selecting 2 stores with ped-count 3 as against selecting 2 stores with ped-count 1, 2, 3, 4

or 5?

10

Page

Probability of selecting 2 stores with ped-count rating 3 is P(A)= 29C2/75C2= 406/2775=

0.146

Total no of stores with ped-count 1,2,3,4 or 5 = 75

Probability of selecting 2 stores with ped-count 1,2,3,4,5

P(B)=1, P(A|B) = 1 as all the stores have any one of these values as ped-count rating.

Q.3 (A) What is the probability that the candidate selected has a managerial skill of less

than 3, considering that the data converge to a normal distribution?

Ans. Here, the formula for z score for Manager skill < 3 used will be

(3 − 𝑚𝑒𝑎𝑛)

𝑧=

𝑆𝑡𝑑. 𝑑𝑒𝑣𝑖𝑎𝑡𝑖𝑜𝑛

DEVIATION 3

Manager skill 3.6380 0.40846 -1.562 0.0594

The value is obtained from z table thus shows that 5.94% of the candidates has a managerial

skill of less than 3.

(B). Suppose profit data converges to a normal distribution. What is the probability

that a crew member selected to give bonus has a skill more than 4? How many such

members are there?

Ans. Let’s assume that company provides bonuses to the managers of top 20% profiting

outlets.

Then we can find the value of the profit by using z score approach as we have considered

that profit data converges to normal distribution.

Here, probability p = 0.8 = 0.5 + 0.3

Hence z score of 0.3 from the z table is 0.84

Hence the value of profit we can get as

𝑥 = 0.84 ∗ 𝑆𝑡𝑑. 𝑑𝑒𝑣𝑖𝑎𝑡𝑖𝑜𝑛 + 𝑚𝑒𝑎𝑛

11

Page

PROFIT

MEAN 276313.6

STANDARD

DEVIATION 89404.07

Therefore, from the data, managers having salary more than this are 17. Out of these 17,

crew member having skill more than 4 are only 2.

(C). Which of the parameters given satisfies the criteria to be tending towards a binomial

distribution?

● The trials are independent.

Hence, in the given data, Hours24 and Resident are the data sets which tend to show binomial

distribution as they can have only two values i.e. “1” or “0”.

Q.4 (A) A researcher has taken a sample of size 70 from a population with a sample mean

as 35 and population standard deviation of 4.62. Construct a 90% confidence interval to

estimate the population mean.

Ans. Here, we are going to find the range +/- from the sample mean that can give us

90% confidence that our population mean also lies in this range.

For that, we consider that sample is normally distributed. Hence, 90% will be divided

equally along the mean.

And, the equation for finding the range for confidence interval is,

𝒔

𝒙 = 𝑺𝒂𝒎𝒑𝒍𝒆 𝑴𝒆𝒂𝒏 ± 𝒁 ∗

√𝒏

Where,

s = sample standard deviation,

n =sample size.

Hence, we can find 2 values of x as,

12

x1 = 34.092

x2 = 35.908

Page

(B) Installation of a certain hardware takes a random amount of time with a standard

deviation of 5 minutes. A computer technician installs this hardware on 64 different

computers,

with the average installation time of 42 minutes. Compute a 95% confidence interval for

the

mean installation time.

Ans.

• Here, we are going to find the range +/- from the sample mean that can give us 95%

confidence that our population mean also lies in this range.

• For that, we consider that sample is normally distributed. Hence, 95% will be

divided equally along the mean.

Hence, the equation for finding the range for confidence interval is

𝒔

𝒙 = 𝒔𝒂𝒎𝒑𝒍𝒆 𝒎𝒆𝒂𝒏 ± 𝒛 ∗

√𝒏

Hence, we can find 2 values of x as

x1 = 40.775

x2 = 43.225

13

Page

7.0 Exhibits

14

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