Managing Ashland MultiComm Services Case

Chapter 6

1. Assuming that the distribution has not changed from what it as in the past year,
what is the probability that the upload speed is

a. Less than 1.0?

We are calculating: P(x <1.00)
First, we must calculate the Z-score for 1.
Z = x – mean / standard deviation
Z = 1 – 1.005 / 0.10 = -0.05

By using excel, I was able to calculate

=NORM.S.DIST(-0.05, 1) = 0.480061194

Therefore, P (x < 1) = 0.4801

b. Between .95 and 1.0?

We are calculating: P (0.95 < x <1.0)
Next, we must calculate the Z-score for 0.95 and 1.
Z = x – mean / standard deviation
Z-score for 1 = 1 – 1.005 / 0.10 = -0.05 (same as above)
Z-score for .95 = .95 – 1.005 / .10 = -0.55

Now we can determine that P (0.95 < x < 1 ) = P (-0.55 < Z <-0.05)
= P (Z < -0.05) – P (Z – 0.55)
Since we already have .4801 from the problem above we need to find P ( z < -0.55).
With the help from excel, I calculated
=NORM.S.DIST (-0.55,0.95) = 0.291159687

Therefore, P (0.95 < x < 1) = 0.4801 – 0.2912 = 0.1889

c. Between 1.0 and 1.05?

We are calculating: P ( 1 < x < 1.05)
Next, we must calculate the Z-score for 1.05, since we already know the Z-score for 1 (-0.05)
Z = x – mean / standard deviation
Z-score for 1.05 = 1.05 – 1.005 / .1 = .045

Now we can determine that P ( 1.05 < x < 1) = P (-0.05 < Z < 0.45)
= P ( Z < 0.45) – P (Z < -0.05)
Since we already know that P (Z < -0.05) = 0.4801, I will use excel to determine P ( Z < 0.45).

= NORM.S.DIST (0.45,1.05) = 0.67364478

Therefore, P (1 < x < 1.05 ) = 0.6736 – 0.4801 = 0.1935

 d. Less than .95 or greater than 1.05?
We are calculating: P (x < 0.95 or x > 1.00)
We already know that the Z-score for .95 is -0.55 and the Z-score for 1.05 is 0.45.
Now we can state that P (x <0.95 ) + P (x > 1.00) = 1 – P(0.95 < x < 1.00)

So since we already used NORM.S.DIST for both values in the problems above, we can
determine that: 0.2911 + 1 – 0.6736

Therefore, P (x < 0.95 or x > 1.00) = 0.6175

2.
Lets say we reduce the standard deviation up to .075.
Probability that the speed is less than 1 = P (Z < ( 1 – 1.005) / (0.075 / 1) )
= P ( Z < -0.067) = 0.4734

Let say we increase the mean upload speed to 1.05.

Probability that the speed is less than 1 = P (Z < ( 1 – 1.05) / (0.10 / 1) )
= P ( Z < 0.5 ) = 0.3085

This shows that the team should focus on process improvement that increases the mean upload
speed to 1.05. This is because it is reducing the probability that the upload speed is below 1.
Changing the standard deviation is not a good alternative due to the fact that the probability is a
bit larger than when the mean is increased to 1.05.

Chapter 7

1. Each day, at 25 random times, the upload speed is measured. Assuming that the
distribution has not changed from what it was in the past year, what is the
probability that the mean upload speed is
a. less than 1.0?
P (mean < 1.0)
Since I used excel for chapter 6, I will also use it here. However, I will use the excel function
NORM.DIST. For this function I need x (the value we are looking at), mean, standard deviation,
and the cumulative number (which is 1 in this case).

X=1
Mean = 1.005
Standard deviation or alpha = .10 / sq root (25) = 0.02
Cumulative = 1

So in excel I put in NORM.DIST(1,1.005,0.02,1), which computes 0.401293674 ≈ 0.4013

b. between 0.95 and 1.0?

P (0.95 < mean <1.0)
I will use the same method here since it is the most simplified and easiest for me to understand.
Now that we have two values I will first compute NORM.DIST for 0.95 and then subtract that
from 0.4013 since that is the value for 1.

In excel: NORM.DIST(0.95, 1.005, 0.02, 1) = 0.002979763

Now I will subtract 0.4013 – 0.002979763 = 0.398313911 ≈ 0.3983

c. between 1.0 and 1.05?

P (1.0 < mean < 1.05)
Here we already know the value for 1.0 = 0.4013

So I will use excel to determine the value for 1.05.

NORM.DIST(1.05,1.005,0.02,1) = 0.987775527

0.987775527 - 0.4013 = 0.5865

d. less than 0.95 or greater than 1.05?

Lastly, we already computed the values for both 0.96 and 1.05. So I will simply subtract the two
numbers and then again subtract by 1 since we need less than 0.96 OR greater than 1.05.

P (less than 0.95 OR > 1.05) = 1 – (P (0.95 < mean < 1 ) + P (1 < mean < 1.05))
= 1 – 0.9848
= 0.0152

e. Suppose that the mean upload speed of today’s sample of 25 is 0.952. What
conclusion can you reach about the upload speed today based on this result?
Explain

In chapter since, we determined the probability that the mean upload speed when between 0.95
and 1.0 is 0.1889. This means that around 19% of the days the mean upload speed is between
0.95 and 1.0. If the mean upload speed is 0.952 today, we can determine that this speed fits
between the 0.95 and 1.0 bracket which accounts for 19% of days.

2. In the previous chapter, we just computed the probability for a single upload speed.
However, now we have computed the probability of mean upload speed. Since we are
determining two different values, I did except there to be some differences in the
numbers we calculated. This is what I found: The probability that upload speed is less
than 1.0 is 0.4801, whereas the mean upload speed is 0.4013. The probability that upload
speed is between 0.95 and 1.0 is 0.1889, whereas the mean upload speed is 0.3983. The
probability that upload speed is between 1.0 and 1.05 is 0.1935, whereas the mean upload
speed is 0.5865. The probability that upload speed is less than 0.95 or greater than 1.05 is
0.6175, whereas the mean upload speed is 0.0152. After comparing all the values, I
notice that the probability of mean upload speed and upload speed less than 1.0 are fairly
similar, however the other cases are different. Since the sample mean upload is more
concentrated around the population mean we can determine that the probabilities of
sample mean close to population mean are higher than those of single upload.
Chapter 8

1. Analyze the results of the survey of Ashland households that receive AMS cable
television service. Write a report that discusses the marketing implications of the
survey results for Ashland MultiComm Services.

In terms of analyzing the results of the survey of Ashland households that receive AMS cable
television service, I will look at households who have telephone services and houses who have
internet services. In order to analyze these results I will calculate some confidence intervals of
population parameters involved in each part of the survey separately. Lets start with telephone
services.

Telephone services:
P for yes = 83 / 418 = 0.198565
P for no = 335 /418 = 0.8014335
Since there are two categories (yes and no), we will have to determine the confidence interval of
both at a 95% confidence internal. I am using 95% because this is the most common confidence
interval. We are going to use the confidence interval equation:

Yes
= 0.198565 +/- 1.96 x sq rt [(0.198565 x ( 1- 0.198565)) / 418 ]
= 0.198565 + / - 0.038243
Confidence interval is (0.160321, 0.236808)

No
= 0.801425 + / - 1.96 x sq rt [(0.801435 x (1-0.801435)) /418]
= 0.801425 + / - 0.038243
Confidence interval is (0.763192, 0.839679)

These calculations show that the maximum number of households do not have telephone services
subscribed from Ashland. It is clear from the table that 335 people do not have telephone
services and 83 people do. However, with the help of confidence intervals we can confirm these
results and verify that more people do not prefer AMS telephone services. Now lets do the same
thing for internet services:

Internet services:
P for yes = 262 / 418 = 0.626794
P for no = 161 / 418 = 0.373206

Yes
= 0.626794 + / - 1.96 x sq rt [(0.626794 x ( 1 – 0.626794)) / 418]
= 0.626794 + / - 0.046367
Confidence interval is (0.580428, 0.673161)

No
= 0.373206 + / - 1.96 x sq rt [(0.373206 x (1 – 0.373206)) / 418]
= 0.373206 + / - 0.046367
Confidence interval is (0.326839, 0.419572)

Again, these calculations show that a majority of AMS customers have internet services over
people who do not.

After looking at these calculations, I can offer several marketing implications that arise as a
result of the survey. AMS needs to put forth marketing efforts in regards to implementing more
telephone services. Only 83 of the 418 households have telephone services. With that being said,
262 of the 418 have internet services which is greater than those who do not. This may be due to
the fact that people no longer use landlines, however AMS should offer a deal where households
are able to have both telephone and internet services. This would increase the overall number of
households who have telephone services.

Chapter 9

1. Compute the sample statistics and determine whether there is evidence that the
population mean upload speed is less than 0.97.

In order to determine whether there is evidence that the population mean upload speed is less
than 0.97 we must run a hypothesis test. The null and alternative hypothesis are below:

Null: µ = 0.97 (The population mean is 0.97)

Alternative: µ < 0.97 (The population mean is less than 0.97)

Let’s determine some values:

n = 50
alpha = 0.05
St dev = ?

Since we do not know the standard deviation we need to calculate it using a t-test. We do this by
first calculating the degrees of freedom which is n -1. In this case, 50-1 = 49 degrees of freedom.
Now we can calculate by using the excel function ==T.INV.2T(probability, degrees of freedom),
which equals 2.009575. This allows us to determine the following values:

Sample mean = 0.9587

St dev = 0.1560
Sample size = 50

Now we run a t-test by using the following formula:

t = sample mean - µ / s
= (0.9587 – 0.97) / (0.1560 / sq rt of 50)
= -0.51
Next, is determining the p-value.
=P ( t < -0.51)
=0.3062
Since the P-value = 0.3062 > alpha = 0.05, we do not reject the null hypothesis that the
population mean is 0.97. Therefore, we reject the alternative hypothesis and accept the null that
the population mean is equal to 0.97.

2. Hello management team, it has come to my attention that we want to ensure that the
mean target upload speed for all internet service subscribers is at least 0.97. After running
a hypothesis test, I can confidently confirm that the population mean is equal to 0.97.
Since the target value is 1.0, it is clear that we do not fall far from our goals.