SVKM’S NMIMS

School of Business Management

PGDM Trimester III Year 01
Academic Year – 2019 – 2020

BUSINESS ANALYTICS
End-Term Evaluation
INSTRUCTIONS:
• Group-based assignment – group performance and individual performance are evaluated.
• All questions are mandatory.
• Make suitable assumptions and document them in your answers.
• Indicate sources of data, wherever used. Indicate the tools used, where appropriate.
• Data can be found on the attached Excel sheet.
• Expected Similarity Index of not more than 15%.
• Create new Sheets as required.
• You are expected to submit all your answers in one Excel. No other document/PDF is expected.
• Identify your answers clearly in the submission. Your answer and the explanation are important.

Introduction and Context:

PLE, headquartered in St. Louis, Missouri, is a privately owned designer and producer of traditional
lawn mowers used by homeowners. In the past 10 years, PLE has added another key product, a medium-
size diesel power lawn tractor with front and rear power take-offs, Class I three-point hitches, four-
wheel drive, power steering, and full hydraulics. This equipment is built primarily for a niche market
consisting of large estates, including golf and country clubs, resorts, private estates, city parks, large
commercial complexes, lawn care service providers, private homeowners with five or more acres, and
government (federal, state, and local) parks, building complexes, and military bases. PLE provides most
of the products to dealerships, which, in turn, sell directly to end users. PLE employs 1,660 people
worldwide. About half the workforce is based in St. Louis; the others spread among their manufacturing
plants. The dominant marketplace is located in parts of the US, Europe; while the emerging marketplace
is in the South America, Pacific rim and China. The market is cyclical, but the different products and
regions balance some of this, with just less than 30% of total sales in the spring and summer (in the
United States), about 25% in the fall, and about 20% in the winter. Annual sales are approximately $180
million.

Both end users and dealers have been established as important customers for PLE. Collection and
analysis of end-user data showed that satisfaction with the products depends on high quality, easy
attachment/dismount of implements, low maintenance, price value, and service. For dealers, key
requirements are high quality, parts and feature availability, rapid restock, discounts, and timeliness of
support. PLE has several key suppliers who supply engines, axles, and various sub-components. To
help manage the company, PLE managers have developed a “balanced scorecard” of measures. The
attached Excel sheet contains the data generated for each of the key measures are stored in a separate
worksheet1.

1 Refer to the first sheet (named ‘Descriptions’) in Excel for description of the data.
Elizabeth Burke has recently joined the PLE management team to oversee production operations. She
has reviewed the types of data that the company collects and has assigned you the responsibility to be
her chief analyst. She has the following situations for you to address.

Situations to be addressed:

Situation 1:

To prepare for this task, you decided to review each worksheet and determine whether the data were
gathered from internal sources, external sources, or from special studies. Also, you need to know
whether the measures are categorical, ordinal, interval, or ratio.

Elizabeth Burke has asked you to do some preliminary analysis of the data. First, she would like you to
edit the worksheets Dealer Satisfaction and End-User Satisfaction to display the total number of
responses to each level of the survey scale across all regions for each year. Second, she wants a
count of the number of failures in the worksheet Mower Test.

Next, Elizabeth has provided you with prices for PLE products for the past 5 years (as in the following
table): Create a new worksheet in the database to compute gross revenues by month and region, as well
as worldwide totals, for each product using the data in Mower Unit Sales and Tractor Unit Sales. Finally,
she wants to know the market share for each product and region based on the PLE and industry sales
data in the database. Create and save these calculations in a new worksheet. Summarize all your
findings in a report to Ms. Burke.

Year Mower Price Tractor Price

2010 $150 $3,250
2011 $175 $3,400
2012 $180 $3,600
2013 $185 $3,700
2014 $190 $3,800

Situation 2:

PLE originally produced lawn mowers, but a significant portion of sales volume over recent years has
come from the growing small-tractor market. As we noted in the case, PLE sells their products
worldwide, with sales regions including North America, South America, Europe, and the Pacific Rim.
Three years ago a new region was opened to serve China, where a booming market for small tractors
has been established. PLE has always emphasized quality and considers the quality it builds into its
products as its primary selling point. In the past 2 years, PLE has also emphasized the ease of use of
their products. Before digging into the details of operations, Elizabeth Burke wants to gain an overview
of PLE’s overall business performance and market position by examining the information provided in
the database. Specifically, she is asking you to construct appropriate charts for the data in the
following worksheets and summarize your conclusions from analysis of these charts.

a. Dealer Satisfaction.
b. End-User Satisfaction.
c. Complaints.
d. Mower Unit Sales.
e. Tractor Unit Sales.
f. On-Time Delivery.
g. Defects after Delivery.
h. Response Time.
As noted in the case, the supply chain worksheets provide cost data associated with logistics between
existing plants and customers as well as proposed new plants.

Ms. Burke wants you to extract the data associated with the unit shipping costs of proposed plant
locations and compare the costs of existing locations against those of the proposed locations using
quartiles.

Ms. Burke would also like a quantitative summary of the average responses for each of the
customer attributes in the worksheet 2014 Customer Survey for each market region as a cross-
tabulation (use PivotTables as appropriate), along with frequency distributions, histograms, and
quartiles of these data.

Situation 3:

In reviewing the PLE data, Elizabeth Burke noticed that defects received from suppliers have decreased
(Defects After Delivery worksheet). Upon investigation, she learned that in 2010, PLE experienced
some quality problems due to an increasing number of defects in materials received from suppliers. The
company instituted an initiative in August 2011 to work with suppliers to reduce these defects, to more
closely coordinate deliveries, and to improve materials quality through reengineering supplier
production policies. Elizabeth noted that the program appeared to reverse an increasing trend in defects;
she would like to predict what might have happened had the supplier initiative not been implemented
and how the number of defects might further be reduced in the near future. In meeting with PLE’s
human resources director, Elizabeth also discovered a concern about the high rate of turnover in its field
service staff. Senior managers have suggested that the department look closer at its recruiting policies,
particularly to try to identify the characteristics of individuals that lead to greater retention. However,
in a recent staff meeting, HR managers could not agree on these characteristics. Some argued that years
of education and grade point averages were good predictors. Others argued that hiring more mature
applicants would lead to greater retention. To study these factors, the staff agreed to conduct a statistical
study to determine the effect that years of education, college grade point average, and age when hired
have on retention. A sample of 40 field service engineers hired 10 years ago was selected to determine
the influence of these variables on how long each individual stayed with the company. Data are
compiled in the Employee Retention worksheet.

Finally, as part of its efforts to remain competitive, PLE tries to keep up with the latest in production
technology. This is especially important in the highly competitive lawn-mower line, where competitors
can gain a real advantage if they develop more cost-effective means of production. The lawn-mower
division therefore spends a great deal of effort in testing new technology. When new production
technology is introduced, firms often experience learning, resulting in a gradual decrease in the time
required to produce successive units. Generally, the rate of improvement declines until the production
time levels off. One example is the production of a new design for lawnmower engines. To determine
the time required to produce these engines, PLE produced 50 units on its production line; test results
are given on the worksheet Engines in the database. Because PLE is continually developing new
technology, understanding the rate of learning can be useful in estimating future production costs
without having to run extensive prototype trials, and Elizabeth would like a better handle on this.

Use techniques of regression analysis to assist her in evaluating the data in these three worksheets
and reaching useful conclusions. Summarize your work in a formal report with all appropriate
results and analyses.

An important part of planning manufacturing capacity is having a good forecast of sales. Elizabeth
Burke is interested in forecasting sales of mowers and tractors in each marketing region as well as
industry sales to assess future changes in market share. She also wants to forecast future increases in
production costs.

Develop forecasting models for these data and prepare a report of your results with appropriate
charts and output from Excel.
Situation 4:

PLE has developed a prototype for a new snow blower for the consumer market. This can exploit the
company’s expertise in small-gasoline-engine technology and also balance seasonal demand cycles in
the North American and European markets to provide additional revenues during the winter months.
Initially, PLE faces two possible decisions: introduce the product globally at a cost of $850,000 or
evaluate it in a North American test market at a cost of $200,000. If it introduces the product globally,
PLE might find either a high or low response to the product. Probabilities of these events are estimated
to be 0.6 and 0.4, respectively. With a high response, expected gross revenues is $2,000,000; with a low
response, the number is $450,000.

If it starts with a North American test market, it might find a low response or a high response with
probabilities 0.3 and 0.7, respectively. This may or may not reflect the global market potential. In any
case, after conducting the market research, PLE next needs to decide whether to keep sales only in
North America, market globally, or drop the product. If the North American response is high and PLE
stays only in North America, the expected revenue is $1,200,000. If it markets globally (at an additional
cost of $200,000), the probability of a high global response is 0.9 with revenues of $2,000,000
($450,000 if the global response is low). If the North American response is low and it remains in North
America, the expected revenue is $200,000. If it markets globally (at an additional cost of $600,000),
the probability of a high global response is 0.05, with revenues of $2,000,000 ($450,000 if the global
response is low).

Construct a decision tree, determine the optimal strategy, and develop a risk profile associated
with the optimal strategy.
Evaluate the sensitivity of the optimal strategy to changes in the probability estimates.
Summarize all your results, including your recommendation and justification for it, in a formal
report to the executive committee, who will ultimately make this decision.