Advanced Business Statistics

You are employed in an entry-level analyst position with company which designs, builds, and sells cell phones. You are in a matrix organization, and you need to accept assignments from the Product Manager of application development. This Product Manager has been given a sketch of the requirements for a weather app, which could be sold by download to company customers. Upon accessing this app, the app would almost immediately provide current weather data based on the user’s GPS location, weather radar, and hourly forecasts for the rest of the day. It would have some other features.

The cost to develop this app would be about $320,000. Since the cell phone company has about a 7% financial return on investment, app sales would have to exceed about $4.6 million to justify the app development cost – so this presents a certain level of financial risk to the company. You need to design a survey to “test the waters” to see how appealing this app would be and what price point would be acceptable to potential customers.

  1. This app may appeal to some customers and not appeal to others. Describe how/why you would divide the potential customers into demographic groups so you could test the appeal to each group. What would those demographic groups be.
  2. You will need to design a survey with statements using a Likert scale of from 1 (strongly disagree) to 5 (strongly agree) to test demographic group opinions about aspects of the appeal of this potential product. Provide one properly formatted sample statement to demonstrate how you would design the questions for the survey. Explain why you designed it this way.
  3. You will need to distribute this survey to a large enough group of people by demographic group so that the statistical analysis of the samples sizes received are large enough to have a small margin of error. Not all patrons who will get the survey will respond, so the distribution needs to be three times larger than the sample expected of completed surveys. How would you propose to distribute the survey to hopefully ensure random sampling.

Demonstrate how you would statistically analyze the results of one of your questions. Suppose that your responses were 200 “1” responses, 400 “2” responses, 500 “3” responses, 600 “4” responses, and 100 “5” responses. Based on this data alone, what is the 95% confidence interval for the population mean response. Solve using Excel and upload the Excel.

 

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