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Submitted By:

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

1.0 Objectives of case study …………………………………………………………………………..1


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

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1.0 Objectives of case study:

To get an estimate of the actual financial impact of:

• increased tenure and check if its impact on financial performance


• 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

2.0 Key Decisions to make:


Whether to:

• Increase the wages


• implement a bonus program
• Introduce new training programs
• develop a career development program

3.0 Primary Analysis:


• 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
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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

Sales Pearson Correlation 1 .924**

Sig. (2-tailed) .000

N 75 75
Profit Pearson Correlation .924** 1
Sig. (2-tailed) .000

N 75 75

**. Correlation is significant at the 0.01 level (2-tailed).

Figure 1 Correlation Between Profit and Sales

• 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.

3.2 Relationship between retention(tenure) and Financial


Performance:

3.2.1 Relationship between Profit and CTenure:


• 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
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Correlations

CTenure Profit

CTenure Pearson Correlation 1 .897**


Sig. (2-tailed) .006

N 7 7
Profit Pearson Correlation .897** 1

Sig. (2-tailed) .006

N 7 7

**. Correlation is significant at the 0.01 level (2-tailed).

Figure 3 Correlation between Ctenure and Profit when managers are


not designated

Correlations
Profit CTenure

Profit Pearson Correlation 1 .228

Sig. (2-tailed) .061

N 68 68
CTenure Pearson Correlation .228 1

Sig. (2-tailed) .061

N 68 68

Figure 2Correlation between Profit and Ctenure where managers are


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.
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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

Profit Pearson Correlation 1 .439**

Sig. (2-tailed) .000

N 75 75
MTenure Pearson Correlation .439** 1

Sig. (2-tailed) .000

N 75 75

**. Correlation is significant at the 0.01 level (2-tailed).


Figure 6Correlation between overall Mtenure and Profit

Correlations

MTenure Profit
MTenure Pearson Correlation 1 .333

Sig. (2-tailed) .054

N 34 34
Profit Pearson Correlation .333 1

Sig. (2-tailed) .054

N 34 34
Figure 5Correlation between Low level Mtenure and profit

Correlations

Profit MTenure

Profit Pearson Correlation 1 -.008

Sig. (2-tailed) .963

N 34 34
MTenure Pearson Correlation -.008 1

Sig. (2-tailed) .963


N 34 34
Figure 4Correlation between High level Mtenure and Profit
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• 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

3.3 Relationship between Profit and Site location factors

• All site location factors (9) are mentioned in Exihibit 2.


• 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:

Figure 7Correlation between profit and site location factors

• From this table following bifurcation can be done:

Significant factors Insignificant facotors


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

3.4 Assumptions and Limitations:


• 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

4.0 Secondary Analysis

• 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

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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

6.0 Additional Questions and solutions related to Case Study

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

Ans. The Total number of outlets are 75

a. More than 2 years


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%

b. Less than 6 months?


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.
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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.
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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?
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Ans. Total number of stores with ped-count rating 3 are 29


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No of ways of selecting 2 stores with ped-count rating 2 is 29C2 = 406


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

TYPE MEAN STAND. Z SCORE FOR < PROBABILITY


DEVIATION 3
Manager skill 3.6380 0.40846 -1.562 0.0594

Hence the probability for Manager skill < 3 is 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
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PROFIT
MEAN 276313.6
STANDARD
DEVIATION 89404.07

Hence, 𝑥 = 0.84 ∗ 89404.07 + 276313.6 = 351413.012


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?

Ans. The criteria of a Binomial distribution are:

● Two outcomes, success and failure are possible on each trial.


● 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.

Hence, z score for probability 0.45 is 1.645.

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,
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x1 = 34.092
x2 = 35.908
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(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, z score for probability 0.475 is 1.960.

Hence, the equation for finding the range for confidence interval is
𝒔
𝒙 = 𝒔𝒂𝒎𝒑𝒍𝒆 𝒎𝒆𝒂𝒏 ± 𝒛 ∗
√𝒏

Where s is sample std. deviation and n is the sample size


Hence, we can find 2 values of x as
x1 = 40.775
x2 = 43.225

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7.0 Exhibits

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