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 ), 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 customers from each company. Because the polling has been done for several years, the standard deviation can be assumed to equal points in each case. Company Year 1 Score Year 2 Score Rite Aid 74 75 Expedia 76 78 J.C. Penney 77 81
Inverse Normal Distribution
The method used for finding the corresponding z-critical value in a normal distribution using the known probability is said to be an inverse normal distribution. The inverse normal distribution is a continuous probability distribution with a family of two parameters.
Mean, Median, Mode
It is a descriptive summary of a data set. It can be defined by using some of the measures. The central tendencies do not provide information regarding individual data from the dataset. However, they give a summary of the data set. The central tendency or measure of central tendency is a central or typical value for a probability distribution.
Z-Scores
A z-score is a unit of measurement used in statistics to describe the position of a raw score in terms of its distance from the mean, measured with reference to standard deviation from the mean. Z-scores are useful in statistics because they allow comparison between two scores that belong to different normal distributions.
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 ), 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 customers from each company. Because the polling has been done for several years, the standard deviation can be assumed to equal points in each case.
| Company | Year 1 Score | Year 2 Score |
| Rite Aid | 74 | 75 |
| Expedia | 76 | 78 |
| J.C. Penney | 77 | 81 |
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
