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Will improving customer service result in higher stock prices for the companies providing the better service? "When a company's satisfaction score has improved over the prior year's results and is above the national average (currently 75.7), studies show its shares have a good chance of outperforming the broad stock market in the long run." The following satisfaction scores of three companies for the 4th quarters of two previous years were obtained from the American Customer Satisfaction Index. Assume that the scores are based on a poll of 52 customers from each company. Because the polling has been done for several years, the standard deviation can be assumed to equal 4 points in each case. Company Year 1 Score Year 2 Score Rite Aid 74 76 Expedia 76 J.C. Penney 76 77 79 a. For Rite Aid, is the increase in the satisfaction score from year 1 to year 2 statistically significant? Use a = .05 and null hypothesis is Hoμ1-2 ≤0. What can you conclude? z value (to 2 decimals) p-value (to 4 decimals) The difference is statistically significant. b. Can you conclude that the year 2 score for Rite Aid is above the national average of 75.7? Use a = .05 and null hypothesis is Hoμ75.7. Enter negative value as negative number. z value p-value (to 2 decimals) (to 4 decimals) We cannot conclude that customer service has improved for Rite Aid. : c. For Expedia, is the increase from year 1 to year 2 statistically significant? Use a = .05 and null hypothesis is Hoμ1 - μz ≤0. z value (to 2 decimals) p-value (to 4 decimals) The difference is not statistically significant. d. When conducting a hypothesis test with the values given for the standard deviation, sample size, and a, how large must the increase from Year 1 to Year 2 be for it to be statistically significant? (to 2 decimals) e. Use the result of part (d) to state whether the increase for J.C. Penney from year 1 to year 2 is statistically significant. The increase is statistically significant.

Will improving customer service result in higher stock prices for the companies providing the better service? "When a company's satisfaction score has improved over the prior year's results and is above the national average (currently 75.7), studies show its shares have a good chance of outperforming the broad stock market in the long run." The following satisfaction scores of three companies for the 4th quarters of two previous years were obtained from the American Customer Satisfaction Index. Assume that the scores are based on a poll of 52 customers from each company. Because the polling has been done for several years, the standard deviation can be assumed to equal 4 points in each case. Company Year 1 Score Year 2 Score Rite Aid 74 76 Expedia 76 J.C. Penney 76 77 79 a. For Rite Aid, is the increase in the satisfaction score from year 1 to year 2 statistically significant? Use a = .05 and null hypothesis is Hoμ1-2 ≤0. What can you conclude? z value (to 2 decimals) p-value (to 4 decimals) The difference is statistically significant. b. Can you conclude that the year 2 score for Rite Aid is above the national average of 75.7? Use a = .05 and null hypothesis is Hoμ75.7. Enter negative value as negative number. z value p-value (to 2 decimals) (to 4 decimals) We cannot conclude that customer service has improved for Rite Aid. : c. For Expedia, is the increase from year 1 to year 2 statistically significant? Use a = .05 and null hypothesis is Hoμ1 - μz ≤0. z value (to 2 decimals) p-value (to 4 decimals) The difference is not statistically significant. d. When conducting a hypothesis test with the values given for the standard deviation, sample size, and a, how large must the increase from Year 1 to Year 2 be for it to be statistically significant? (to 2 decimals) e. Use the result of part (d) to state whether the increase for J.C. Penney from year 1 to year 2 is statistically significant. The increase is statistically significant.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Will improving customer service result in higher stock prices for the companies providing the better service? "When a company's satisfaction score has improved over the prior year's results and is above the national average (currently 75.7), studies show its shares have a good chance of outperforming the broad stock market in the long run." The following satisfaction scores of three companies for the 4th quarters of two previous years were obtained from the American Customer Satisfaction Index. Assume that the scores are based on a poll of 52 customers from each company. Because the polling has been done for several years, the standard deviation can be assumed to equal 4 points in each case. Company Year 1 Score Year 2 Score Rite Aid 74 76 Expedia 76 J.C. Penney 76 77 79 a. For Rite Aid, is the increase in the satisfaction score from year 1 to year 2 statistically significant? Use a = .05 and null hypothesis is Hoμ1-2 ≤0. What can you conclude? z value (to 2 decimals) p-value (to 4 decimals) The difference is statistically significant. b. Can you conclude that the year 2 score for Rite Aid is above the national average of 75.7? Use a = .05 and null hypothesis is Hoμ75.7. Enter negative value as negative number. z value p-value (to 2 decimals) (to 4 decimals) We cannot conclude that customer service has improved for Rite Aid. : c. For Expedia, is the increase from year 1 to year 2 statistically significant? Use a = .05 and null hypothesis is Hoμ1 - μz ≤0. z value (to 2 decimals) p-value (to 4 decimals) The difference is not statistically significant. d. When conducting a hypothesis test with the values given for the standard deviation, sample size, and a, how large must the increase from Year 1 to Year 2 be for it to be statistically significant? (to 2 decimals) e. Use the result of part (d) to state whether the increase for J.C. Penney from year 1 to year 2 is statistically significant. The increase is statistically significant.
Transcribed Image Text:Will improving customer service result in higher stock prices for the companies providing the better service? "When a company's satisfaction score has improved over the prior year's results and is above the national average (currently 75.7), studies show its shares have a good chance of outperforming the broad stock market in the long run." The following satisfaction scores of three companies for the 4th quarters of two previous years were obtained from the American Customer Satisfaction Index. Assume that the scores are based on a poll of 52 customers from each company. Because the polling has been done for several years, the standard deviation can be assumed to equal 4 points in each case. Company Year 1 Score Year 2 Score Rite Aid 74 76 Expedia 76 J.C. Penney 76 77 79 a. For Rite Aid, is the increase in the satisfaction score from year 1 to year 2 statistically significant? Use a = .05 and null hypothesis is Hoμ1-2 ≤0. What can you conclude? z value (to 2 decimals) p-value (to 4 decimals) The difference is statistically significant. b. Can you conclude that the year 2 score for Rite Aid is above the national average of 75.7? Use a = .05 and null hypothesis is Hoμ75.7. Enter negative value as negative number. z value p-value (to 2 decimals) (to 4 decimals) We cannot conclude that customer service has improved for Rite Aid. : c. For Expedia, is the increase from year 1 to year 2 statistically significant? Use a = .05 and null hypothesis is Hoμ1 - μz ≤0. z value (to 2 decimals) p-value (to 4 decimals) The difference is not statistically significant. d. When conducting a hypothesis test with the values given for the standard deviation, sample size, and a, how large must the increase from Year 1 to Year 2 be for it to be statistically significant? (to 2 decimals) e. Use the result of part (d) to state whether the increase for J.C. Penney from year 1 to year 2 is statistically significant. The increase is statistically significant.
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