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Module 9 - Coefficient Correlation

Researchers investigated the relationship between number of weekend television commercials and sales of stereo and sound equipment at a store. Analysis of the data found a high positive correlation (r=0.8956) between commercials and sales. This correlation was determined to be statistically significant at the 0.01 level. It was concluded that 80.21% of changes in sales could be explained by changes in commercials. The store manager is recommended to increase television advertising, especially on weekends, to potentially generate higher product sales.

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0% found this document useful (0 votes)
113 views15 pages

Module 9 - Coefficient Correlation

Researchers investigated the relationship between number of weekend television commercials and sales of stereo and sound equipment at a store. Analysis of the data found a high positive correlation (r=0.8956) between commercials and sales. This correlation was determined to be statistically significant at the 0.01 level. It was concluded that 80.21% of changes in sales could be explained by changes in commercials. The store manager is recommended to increase television advertising, especially on weekends, to potentially generate higher product sales.

Uploaded by

Layla Gomez
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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A group of independent researchers investigated the relationship between calories and fat of coffee drinks at two

well known coffee shops. The table below shows the result of the experiment. Determine the extend of relationshi
of the two variables. At a .05 level of significance, is there significant relationship between calories and fat of the
coffee drinks from the two popular coffee shops?

Products Calories (X) Fat (Y) X*Y


K iced mocha swirl latte 240 8.0 1920
Z coffee frappucino blended coffee 260 3.5 910
K coffee coolatta 350 22.0 7700
Z coffee iced coffee mocha expresso 350 20.0 7000
K mocha frappucino blended coffee 420 16.0 6720
Z chocolate brownie frappucino blended coffee 510 22.0 11220
Z chocolate frappucino blended crème 530 19.0 10070
Total 2660 110.5 45540

The focus of the problem is to measure the extent of and significant relationship of calories and fat of the coffee
drinks from two coffee shops.

As previously mentioned, your guide in writing your hypothesis is the given question in the problem, which is you
alternative hypothesis; and you need to state it in declarative form. (no value should appear - both null and
alternative hypothesis.)

Null hypothesis: There is no significant relationship between calories and fats of the coffee drinks from two
popular coffee shops.

Alternative There is significant relationship between calories and fats of the coffee drinks from two
hypothesis: popular coffee shops.

Since the hypothesis is a two-tail, no-directional hypothesis, you need to divide the level of significance
by 2.

Level of Significance: .05/2 = 0.025

Then, determine the degree of freedom, the formula of which is n - 2

Degree of freedom: n - 2 = 7 - 2 = 5

Determine the critical r-value from the table given, using 0,025 level of significance and degree of
freedom 5.

Critical r = ± 0.755

Decision rule: Reject the null hypothesis if r > +0.755 or r < -0.755 otherwise, do not reject the
null hypothesis.
Decision rule: Reject the null hypothesis if r > +0.755 or r < -0.755 otherwise, do not reject the
null hypothesis.

Computation:

r = 0.7196

Next, describe the extent and direction of the relationship of the calories and fat of coffee drink from the two coff
shops.

The r-value of 0.7196 reflects the high positive relationship of the calories and fat of coffee drinks.

Then, measure and describe the strength of relationship of the two variables.

r² = 0.7196² = 0.5178 or 51.78%

Next, state your conclusions and give your recommendations.

Conclusion: Do not reject the null hypothesis, 0.7196 < 0.755, which means there is no significant
relationship between calories and fat of the coffee drinks from the two coffee shops.

Recommendations:

Although there is a high positive correlation between calories and fat of the coffee drinks
from the two coffee shops, the relationship is not significant which means that the variatio
in the fat content of the coffee drinks is not caused by the changes in its calories content.
Still, management of the two coffee should need to consider the mixture of their coffee
drinks and make it healthier so their customers will enjoy and appreciate it more. (You can
give more recommendations aside from the given example.)
and fat of coffee drinks at two
rmine the extend of relationship
tween calories and fat of the

X² Y²
57600 64.0
67600 12.25
122500 484.0
122500 400.0
176400 256.0
260100 484.0
280900 361.0
1087600 2061.3

calories and fat of the coffee

on in the problem, which is your


uld appear - both null and

s of the coffee drinks from two

the coffee drinks from two

e level of significance

e and degree of

e, do not reject the


f coffee drink from the two coffee

of coffee drinks.

ns there is no significant
om the two coffee shops.

es and fat of the coffee drinks


which means that the variation
anges in its calories content.
the mixture of their coffee
nd appreciate it more. (You can
The store manager wants to determine the relationship between the number of weekend television
commercials shown and the sales of stereo and sound equipment at the store. The table below shows the
gathered data. Determine the extent of relationship of the two variables; and at a .01 alpha, is there significant
relationship between number of weekend television commercials and the sales at the stereo and sound
equipment store?

Week Number of TV weekend Sales (Y) X*Y X² Y²


commercial (X) ($100s)
1 3 52 156 9 2704
2 6 58 348 36 3364
3 2 43 86 4 1849
4 4 55 220 16 3025
5 5 56 280 25 3136
6 2 40 80 4 1600
7 5 64 320 25 4096
8 3 49 147 9 2401
9 4 60 240 16 3600
10 1 39 39 1 1521
Total 35 516 1916 145 27296

Null hypothesis: There is no significant relationship between number of weekend television commercials
and the sales at the stereo and sound equipment store.

Alternative There is significant relationship between number of weekend television commercials and
hypothesis: the sales at the stereo and sound equipment store.

Level of significance: 0.01/2 = 0.005

Degree of freedom: 10 - 2 = 8

Critical r-value = ± 0.765

Decision rule: Reject the null hypothesis if r > +0.765 or r < -0.765 otherwise, do not reject
the null hypothesis.

Computation:
There is a high positive correlation between number of weekend television commercials an
and sound equipment.

r² = 0.8956² = 0.8021 or 80.21%

The r2 value suggests that 80.21% of the changes in the sales of stereo and sound equipme
be explained by the changes in number of weekend television commercials and the 19.79%
unexplained factors.

Reject null hypothesis, 0.8956 > 0.765, which means there is significa
Conclusion: between number of weekend television commercials and sales of ste
equipment store.

Recommendations: Since the number of weekend television commercials has shown sign
with the sales of the stereo and sound equipment, the store manage
investing more on its marketing activities particularly on television c
particularly during weekends to generate higher sales of its product
most people are off from work and spend times with their families a
activities together which include watching television. Thus, more pe
weekend commercials on television which may encourage themto b
especially if the television advertisements are enticing to them. (You
recommendations aside from the given example.)
television
elow shows the
a, is there significant
eo and sound

levision commercials

ision commercials and

10 (1916) - (35)*(516) 1100

10 (145) - (35)² * 10 (27296) - (516)² 15 81.878 1228.17


0.8956
r = 0.8956

levision commercials and sales of stereo

ereo and sound equipment of the store can


mercials and the 19.79% are caused by other

h means there is significant relationship


mercials and sales of stereo and sound

mercials has shown significant relationship


ment, the store manager should consider
rticularly on television commercials
gher sales of its products. During weekends,
mes with their families and share or do
elevision. Thus, more people see and
ay encourage themto buy the products
e enticing to them. (You can give more
mple.)

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