Research Methods for Managerial Decisions
Lauren Chedister
University of Phoenix
MBA 510: Managerial Decision Making
Instructor: David Lantz
October 20, 2008
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Research Methods for Managerial Decisions
A year after CoffeeTime entered India; profits have been reported from the chain’s first and only outlet in Mumbai. CoffeeTime’s next areas of focus are strengthening its presence and introducing a new snack. Statistical techniques such as multiple regression, Z test for proportions and the chi-square test may aide in the making informed business decisions.
Normal Values vs. Lagged Values
In using the normal values for the regression model, Laura is testing for the correlation between revenues, weekly advertising expenditure, the price index and the estimates on Quick Brew’s weekly advertising expenditure of the current week. If Laura chooses to use the lagged values for the regression model, she is assuming there is a correlation between the current week’s revenues, the prior week’s advertising expenditure, the prior week’s price index and Quick Brew’s prior week estimates weekly advertising expenditure of the same week.
Model Optimization
CoffeeTime could further optimize this model by using normal and lagged values. If Laura uses the normal values for the weekly advertising expenditure and the price index, and the lagged values for the weekly advertising expenditure, the price index and the estimate on Quick Brew’s weekly advertising expenditure, she will have a higher coefficient of multiple determination. The coefficient of multiple determination, or R², will be 0.756, which is a high degree of correlation.
Chi Square Test Results
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