OPRE 506 Homework # 3

Problems from the Statistics for Managers Textbook

1. The more costly and time consuming it is to export and import, the more difficult it is for local
companies to be competitive and to reach international markets. As part of an initial investigation
exploring foreign market entry, 10 countries were selected from each of four global regions. The cost
associated with importing a standardized cargo of goods by sea transport in these countries (in US$ per
container) is stored in the attached file, ForeignMarket2. (Data extracted from doingbusiness.org/data.)

a. At the 0.05 level of significance, is there evidence of difference in the mean cost of importing across
the four global regions?

SUMMARY
Groups Count Sum Average Variance
East Asia & Pacific 10 6937 693.7 25662.46
Eastern Europe &
Central Asia 10 15585 1558.5 417805.8
Latin American &
Carribbean 10 19396 1939.6 736679.6
Middle East &
North Africa 10 15259 1525.9 751524.8

ANOVA
Source of
Variation SS df MS F P-value F crit
2758458.625
Between Groups 8275375.8750 3 0 5.7121 0.0026 2.8663
17385053.900
Within Groups 0 36 482918.1639

25660429.775
Total 0 39        
Level of
significance   0.05
H0 All means are equal
H1 At least one mean is different

Reject the H0 (null) at least one mean is different

b. If appropriate, determine which global regions differ in mean cost of importing.

 1:Est Asia and Pasific And 2:Astern Europe and Central Asia are different

Sample Sample Absolute Std. Error Critical

Differenc of
Group Mean Size Comparison e Difference Range
832.867
1: East Asia & Pacific 693.7 10 Group 1 to Group 2 864.8 219.7540 6 M
2: Eastern Europe & Central 832.867
Asia 1558.5 10 Group 1 to Group 3 1245.9 219.7540 6 M
3: Latin American & 832.867
Carribbean 1939.6 10 Group 1 to Group 4 832.2 219.7540 6 M
832.867
4: Middle East & North Africa 1525.9 10 Group 2 to Group 3 381.1 219.7540 6 M
832.867
Group 2 to Group 4 32.6 219.7540 6 M
832.867
Other Data Group 3 to Group 4 413.7 219.7540 6 M
Level of significance 0.05
Numerator d.f. 4
Denominator d.f. 36
482918.
MSW 2
Q Statistic 3.79

c. At the 0.05 level of significance is there evidence of difference in the variation in cost of importing
among the four global regions?

P value is .1470 and its greater than .05 so all variation is the same.

SUMMARY
Varianc
Groups Count Sum Average e
131 6622.84
East Asia & Pacific
10 3 131.3 4
Eastern Europe & 479 200778.
Central Asia 10 5 479.5 9
Latin American & 658
Carribbean 10 0 658 265510
Middle East & 486 555570.
North Africa 10 9 486.9 7

ANOVA
Source of SS df MS F P- F crit
 Variation value
488583.091 2.866
Between Groups 1465749 3 7 1.9002 0.1470 3
257120.611
Within Groups 9256342 36 1

1072209
Total 1 39        
Level of
significance 0.05

H0 All variation is the same

H1 At least one is different
do not reject the H0 null

d. Which global region(s) should you consider for foreign market entry? Explain.
East Asia and Pacific has the lowest cost of importing .

Groups Count Sum Average Variance

25662.4
East Asia & Pacific
10 6937 693.7 6
Eastern Europe & 417805.
Central Asia 10 15585 1558.5 8
Latin American & 736679.
Carribbean 10 19396 1939.6 6
Middle East & North 751524.
Africa 10 15259 1525.9 8

2. An experiment was conducted to try to resolve a problem of brake discs overheating at high
speed on construction equipment. Five different brake discs were measured by two different
temperature gauges. The temperature of each brake disc and gauge combination was measured at
eight different times and the results stored in the attached file, Brakes. Source: Data extracted from
M. Awad, T. P. Erdmann, V. Shansal, and B. Barth, “A Measurement System Analysis Approach for
Hard-to-Repeat Events,” Quality Engineering 21 (2009): 300-305. At the 0.05 level of significance,
a. Is there an interaction between brake discs and the gauges?

H0 NO INTRACTION H1:THERE IS INTRACTION

P value is .96138 > .05 so there is not enough evidence to say there is an intraction

ANOVA
Source of Variation SS df MS F P-value F crit
72207.5 18051.8 7.77011 3.06E- 2.50265646
Sample 5 4 9 9 05 3
340.312 340.312 0.14648 0.7030 3.97777939
Columns 5 1 5 2 8 3
0.15226 0.9613 2.50265646
Interaction 1415 4 353.75 5 8 3
162627. 2323.24
Within 1 70 5

Total 236590 79        

A:H0 no interaction H1 there is an

interaction There is no enough evedince to say there is an intraction

b. Is there an effect due to brake discs?

B:H0 means are equal H1 at least one mean differs Reject H0 there is enough to say there is an effect due to break
P value is .0003<.05

ANOVA
Source of Variation SS df MS F P-value F crit
72207.5 18051.8 7.77011 3.06E- 2.50265646
Sample 5 4 9 9 05 3
340.312 340.312 0.14648 0.7030 3.97777939
Columns 5 1 5 2 8 3
0.15226 0.9613 2.50265646
Interaction 1415 4 353.75 5 8 3
162627. 2323.24
Within 1 70 5

Total 236590 79        

c. Is there an effect due to the gauges?

C:H0 means are equal H1 at least one mean differs do not reject H0 there is not enough evedince to say there is an
P value is .70308>.05
 ANOVA
Source of Variation SS df MS F P-value F crit
72207.5 18051.8 7.77011 3.06E- 2.50265646
Sample 5 4 9 9 05 3
340.312 340.312 0.14648 0.7030 3.97777939
Columns 5 1 5 2 8 3
0.15226 0.9613 2.50265646
Interaction 1415 4 353.75 5 8 3
162627. 2323.24
Within 1 70 5

Total 236590 79        

e. Plot the mean temperature for each brake disc for each gauge.

Chart Title
180
160
140
120
100
80
60
40
20
0
part 1 part 2 part 3 part 4 part 5

gauge 1 gauge 2

f. Discuss the results of (a) through (d)

Through using the plot we can say that Part1 is low, part 3 is the next lowest, and part2 is the highest.

3. Is an MBA a golden ticket? Pursuing an MBA is a major personal investment. Tuition and expenses
associated with business school programs are costly, but the high costs come with hopes of career
advancement and big salaries. A prospective MBA student would like to examine the factors that impact
starting salary upon graduation and decides to develop a model that uses program per-year tuition as a
predictor of starting salary. Data were collected for 37 full-time MBA programs offered at private
universities. The data are stored in the attached file, FTMBA. (Data extracted from “U.S. News Business
School Compass,” available at bit.ly/1k-T08Jg.)
a. Construct a scatter plot.

Average starting salary and bonus ($)

160000

140000

120000

100000

80000

60000

40000

20000

0
30000 35000 40000 45000 50000 55000 60000 65000 70000

b. Assuming a linear relationship, use the least-squares method to determine the regression coefficients
b0 and b1.

Coefficient Standard Lower Upper Lower Upper

  s Error t Stat P-value 95% 95% 95.0% 95.0%
16918.7089 - 0.17997 - 11198.9 - 11198.9
Intercept -23147.8 5 1.368178908 6 57494.6 8 57494.6 8
Tuition per year 0.32997289 3.38E- 1.91297 3.25273 1.91297 3.25273
($) 2.582854 9 7.827472126 09 3 4 3 4
BO =-23147
B1=2.582854

c. Interpret the meaning of the slope, b1, in this problem.

B1 means the mean tuition will increase by 2.5828 for each increase for salary

d. Predict the mean starting salary upon graduation for a program that has a per year tuition cost of ?

y=2.582854(50450)+-23147.8

=107,157.1843

e. What insights do you gain about the relationship between program per-year tuition and starting
salary upon graduation?

-There is a positive relationship between tuition and starting salary.The higher tuition the higher starting
salary.

-We can expect for each additional unit of tuition the mean starting salary will go up by 2.582854
f. Determine the coefficient of determination, r2, and interpret its meaning.

R square is .636437

It means that 63.64% of the variation in the tuition can be explained by the starting salary.

g. Determine the standard error of the estimate.

18245.4
Standard Error 5

h. How useful do you think this regression model is for predicting starting salary?
Because its 63.64% we can say that this regression model is moderately useful .