A recent PwC Supply Global Chain survey indicated that companies that acknowledge the supply chain as a strategic asset achieve 70 percent higher performance. The “Leaders” in the survey point to next-generation supply chains, which are fast, flexible, and responsive. They are more concerned with skills that separate a company from the crowd: 51 percent say differentiating capabilities is the real key to success. What additional information would you want to know about the survey before you accepted the results of the study?

Four different beverages are sold at a fast-food restaurant: soft drinks, tea, coffee, and bottled water.

a. Explain why the type of beverage sold is an example of a categorical variable.

b. Explain why the type of beverage is an example of a nominalscaled variable.

Raner, Harris, & Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two offices-one in Chicago and one in Minneapolis. The firm classifies the direct costs of consulting jobs as variable costs. A contribution format segmented income statement for the company's most recent year is given below: " $$ \begin{matrix} \text{ } & \text{ } & \text{Office}\\ \text{ } & \text{Total Company} & \text{Chicago} & \text{Minneapolis}\\ \text{Sales} & \text{\$450.000} & \text{100\\%} & \text{\$ 150.000 } & \text{100\\%} & \text{\$ 300.000} & \text{100\\%}\\ \text{Variable expenses} & \text{225.000} & \text{50\\%} & \text{45.000} & \text{30} & \text{180.000} & \text{60}\\ \text{Contribution margin} & \text{225.000} & \text{50\\%} & \text{105.000} & \text{70} & \text{120.000} & \text{40}\\ \text{Traceable fixed expenses} & \text{126.000} & \text{28\\%} & \text{78.000} & \text{52} & \text{48.000} & \text{16}\\ \text{Office segment margin} & \text{99.000} & \text{22\\%} & \text{\$ 27.000} & \text{18\\%} & \text{\$ 72.000} & \text{24\\%}\\ \text{Common fixed expenses not traceable to offices} & \text{63.000} & \text{14\\%}\\ \text{Net operating income} & \text{\$ 36.000} & \text{8\\%}\\ \end{matrix} $$ 1. Compute the companywide break-even point in dollar sales. Also, compute the break-even point for the Chicago office and for the Minneapolis office. Is the companywide break-even point greater than, less than, or equal to the sum of the Chicago and Minneapolis break-even points? Why? 2. By how much would the company's net operating income increase if Minneapolis increased its sales by $75.000 per year? Assume no change in cost behavior patterns. 3. Refer to the original data. Assume that sales in Chicago increase by$50.000 next year and that sales in Minneapolis remain unchanged. Assume no change in fixed costs. a. Prepare a new segmented income statement for the company using the above format. Show both amounts and percentages. b. Observe from the income statement you have prepared that the contribution margin ratio for Chicago has remained unchanged at 70% (the same as in the above data) but that the segment margin ratio has changed. How do you explain the change in the segment margin ratio?

To the Internal Revenue Service, the reasonableness of total itemized deductions depends on the taxpayer’s adjusted gross income. Large deductions, which include charity and medical deductions, are more reasonable for taxpayers with large adjusted gross incomes. If a taxpayer claims larger than average itemized deductions for a given level of income, the chances of an IRS audit are increased. Data (in thousands of dollars) on adjusted gross income and the average or reasonable amount of itemized deductions follow.

$$\begin{matrix} \text{ } & \text{Reasonable Amount of}\\ \text{Adjusted Gross Income (\$1000s)} & \text{Itemized Deductions (\$1000s)}\\ \hline \text{22} & \text{9.6}\\ \text{27} & \text{9.6}\\ \text{32} & \text{10.1}\\ \text{48} & \text{11.1}\\ \text{65} & \text{13.5}\\ \text{85} & \text{17.7}\\ \text{120} & \text{25.5}\\ \end{matrix}$$

Develop a scatter diagram for these data with adjusted gross income as the independent variable.

You want to select a random sample of n=1 from a population of three items (which are called A, B, and C ). The rule for selecting the sample is as follows: Flip a coin; if it is heads, pick item A; if it is tails, flip the coin again; this time, if it is heads, choose B; if it is tails, choose C. Explain why this is a probability sample but not a simple random sample.

Four different paints are advertised as having the same drying time. To check the manufacturer’s claims, five samples were tested for each of the paints. The time in minutes until the paint was dry enough for a second coat to be applied was recorded. The following data were obtained.

$$\begin{matrix} \text{Paint 1} & \text{Paint 2} & \text{Paint 3} & \text{Paint 4}\\ \text{128} & \text{144} & \text{133} & \text{150}\\ \text{137} & \text{133} & \text{143} & \text{142}\\ \text{135} & \text{142} & \text{137} & \text{135}\\ \text{124} & \text{146} & \text{136} & \text{140}\\ \text{141} & \text{130} & \text{131} & \text{153}\\ \end{matrix}$$

At the $\alpha =$ .05 level of significance, test to see whether the mean drying time is the same for each type of paint.

To study the effect of temperature on yield in a chemical process, five batches were produced at each of three temperature levels. The results follow. Construct an analysis of variance table. Use a .05 level of significance to test whether the temperature level has an effect on the mean yield of the process.

$$\begin{matrix} \text{ } & \text{Temperature}\\ \text{50}^\circ\text{C} & \text{60}^\circ \text{C} & \text{70}^\circ\text{C}\\ \text{34} & \text{30} & \text{23}\\ \text{24} & \text{31} & \text{28}\\ \text{36} & \text{34} & \text{28}\\ \text{39} & \text{23} & \text{30}\\ \text{32} & \text{27} & \text{31}\\ \end{matrix}$$

A manufacturer produces both a deluxe and a standard model of an automatic sander designed for home use. Selling prices obtained from a sample of retail outlets follow.

$$\begin{matrix} \text{ } & \text{Model Price (\$)} & \text{ } & & \text{Model Price (\$)} & \text{ }\\ \text{Retail Outlet} & \text{Deluxe} & \text{Standard} & \text{Retail Outlet} & \text{Deluxe} & \text{Standard}\\ \text{1} & \text{39} & \text{27} & \text{5} & \text{40} & \text{30}\\ \text{2} & \text{39} & \text{28} & \text{6} & \text{39} & \text{34}\\ \text{3} & \text{45} & \text{35} & \text{7} & \text{35} & \text{29}\\ \text{4} & \text{38} & \text{30}\\ \end{matrix}$$

a. The manufacturer’s suggested retail prices for the two models show a $10 price differential. Use a .05 level of significance and test that the mean difference between the prices of the two models is$10. b. What is the 95% confidence interval for the difference between the mean prices of the two models?

Commercial real estate prices and rental rates suffered substantial declines in 2008 and 2009 (Newsweek, July 27, 2009). These declines were particularly severe in Asia; annual lease rates in Tokyo, Hong Kong, and Singapore declined by 40% or more. Even with such large declines, annual lease rates in Asia were still higher than those in many cities in Europe. Annual lease rates for a sample of 30 commercial properties in Hong Kong showed a mean of $\$1,114$ per square meter with a standard deviation of $\$230$.

Annual lease rates for a sample of 40 commercial properties in Paris showed a mean lease rate of $\$989$ per square meter with a standard deviation of $\$195$.

a. On the basis of the sample results, can we conclude that the mean annual lease rate is higher in Hong Kong than in Paris? Develop appropriate null and alternative hypotheses.

b. Use $\alpha$ = .01. What is your conclusion?

The Coca-Cola Company reported that the mean per capita annual sales of its beverages in the United States was 423 eight-ounce servings (Coca-Cola Company website, February 3, 2009). Suppose you are curious whether the consumption of Coca-Cola beverages is higher in Atlanta, Georgia, the location of Coca-Cola’s corporate headquarters. A sample of 36 individuals from the Atlanta area showed a sample mean annual consumption of 460.4 eight-ounce servings with a standard deviation of s = 101.9 ounces. Using $\alpha$= .05, do the sample results support the conclusion that mean annual consumption of Coca-Cola beverage products is higher in Atlanta?

Sales personnel for Skillings Distributors submit weekly reports listing the customer contacts made during the week. A sample of $65$ weekly reports showed a sample mean of $19.5$ customer contacts per week. The sample standard deviation was $5.2.$ Provide $90\%$ and $95\%$ confidence intervals for the population mean number of weekly customer contacts for the sales personnel.

In an attempt to assess total daily travel taxes in various cities, the Global Business Travel Association conducted a study of daily travel taxes on lodging, rental car, and meals (GBTA Foundation website, October 30, 2012). The data contained in the WEBfile named TravelTax are consistent with the findings of that study for business travel to Chicago. Assume the population standard deviation is known to be $8.50 and develop a 95% confidence interval of the population mean total daily travel taxes for Chicago.

Dobbs Wholesale Antiques makes all sales under terms of FOB shipping point. The company usually ships inventory to customers approximately one week after receiving the order. For orders received late in December, Kathy Dobbs, the owner, decides when to ship the goods. If profits are already at an acceptable level, Dobbs delays shipment until January. If profits for the current year are lagging behind expectations, Dobbs ships the goods during December. 1. Under Dobbs’ FOB policy, when should the company record a sale? 2. Do you approve or disapprove of Dobbs’ manner of deciding when to ship goods to customers and record the sales revenue? If you approve, give your reason. If you disapprove, identify a better way to decide when to ship goods. (There is no accounting rule against Dobbs’ practice.)

As player salaries have increased, the cost of attending baseball games has increased dramatically. The following histogram visualizes the total cost (doller) for four tickets, two beers, four soft drinks, four hot dogs, two game programs, two baseball caps, and parking for one vehicle at each of the 30 Major League Baseball parks during the 2009 season that is stored in BBCost.

What conclusions can you reach concerning the cost of attending a baseball game at different ballparks?