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PRACTICE EXAM PAPER 2

(MIS171 – Business Analytics)
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READ INSTRUCTIONS BEFORE COMMENCING

 Plagiarism, Collusion and Contract Cheating, constitute cheating and are considered
extremely serious breaches of Academic Integrity. Students identified to have
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Deakin College may make and retain copies of this work for the purposes of
marking, review and checks of academic integrity.

Important Note:

 This is an open book exam

 You may use a calculator
 You may use an (non-electronic or electronic) dictionary
MIS171 EXAMINATION INSTRUCTIONS
____________________________________________________________________________

READ INSTRUCTIONS BEFORE COMMENCING

1. You have 2 hours and 15 minutes to complete this exam. If you commence the exam late
the exam will still close at the set time.

2. This is a Moodle exam quiz which will automatically be submitted at the end of the allowed
exam time so please manage your time carefully and complete the questions required
within the given time.

3. There is no exam hurdle for this unit.

4. This examination consists of 6 questions and is marked out of 50 marks. It represents 50%
of the total assessment in this unit.

5. Unit specific instructions

 Please answer all the questions
 No referencing or citations are needed in responses

MIS171/MISP171 Business Analytics PRACTICE EXAM PAPER 2 Page 2 of 13

Question 1 - This question contains 2 parts [2.5+7.5] = 10 Marks

1.1 To estimate how much to spend on advertising, Alexico Pty Ltd needs to know the average
advertising expenses done by the competitors per month. A sample of 50 competitors was
randomly selected and draw the results to be used in budgeting for next year.

a. What is the variable of interest? (0.5 mark)

The advertising expenses

b. What is the population of interest? (0.5 mark)

Advertising expenses by all the competitors

c. What is the parameter Alexico needs? (0.5 mark)

Average of the advertising expenses of all competitors

d. What is the sample? (0.5 mark)

50 competitors

e. What is the statistic? (0.5 mark)

Average of advertising expenses of the 50 competitors

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Question 1 continued.

1.2 In a sample study done using the following data set of customer satisfaction survey scores 0-30
on a new toy drone, a descriptive summary is drawn.

Exhibit 1.2.1. Data set

15 8 11 13 10 11
14 13 4 16 24 11

Exhibit 1.2.2. Summary statistics

Customer satisfaction survey scores (on a new toy drone)
Mean 12.5
Standard Error 1.400757
Median 12
Mode 11
Standard Deviation 4.852366
Sample Variance 23.54545
Kurtosis 2.608848
Skewness 0.813519
Range 20
Minimum 4
Maximum 24
Sum 150
Count 12
Q1 10.75
Q3 14.25
IQR 3.5
Upper Fence 19.5
Lower Fence 5.5

a. Determine the type and scale of this variable ‘Customer satisfaction survey’. (0.5 mark)
Numerical / Ratio
b. Calculate and fill in the blanks (shaded) of the above descriptive summary statistics table. Show
your workings below. (2.5 marks)
Please use the table above

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1.2

c. Using the summary measures from Exhibit 1.2.2.

I. Describe the shape of the data for the variable ‘Customer satisfaction survey score’ and
explain how have you come to this decision? (0.5 mark)
Mean = 12.5 Median = 12 This means that Mean > Median
Therefore the distribution is positive
Skewness is 0.81 which is a positive value. This means that the distribution is positive

II. Specify if there are any unusual values in the data set. Provide reasons (0.5 mark)

Lower fence is 5.5 > Minimum is 4 This means that 4 is an unusual value
Upper fence is 19.5 < Maximum is 24 This means that 24 is an unusual value

d. Do you think the sample data used in part (a) is a suitable size for inferential Statistics, Explain?
(0.5 mark)

We cannot conclude that the sample size is sufficient as we don’t have enough information given
about the population size. A rule of thumb can state that a sufficient sample size would be
approximately 10% of the population as long as it doesn’t exceed 1000.

1.2

e. Based on your results from Exhibit 1.2.2., write a brief report in plain language about the variable
‘Customer satisfaction survey scores’, highlighting the most important characteristics. (3 marks)

Mean: 12.5
On average the customer satisfaction score on the new toy drone is 12.5

Median: 12
50% of the customer satisfaction scores are less than 12 and 50% of the scores are greater
than 12

Maximum: 24
The highest satisfaction score was 24

Minimum: 4
The lowest satisfaction score was 4

Q1: 10.75
25% of the satisfaction scores were below 10.75.
75% of the satisfaction scores were above 10.75

Q3: 14.25
25% of the scores were above 14.25

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75% of the scores were below 14.25

IQR: 3.5
The range of the middle 50% of the scores was 3.5

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Question 2 - This question contains 2 parts
[5+5] = 10 Marks

2.1 Toyota Australia has recently conducted a survey to analyse customer preference for two types
of their cars in 2018. As an initial step, they collected the following information from a sample of
550 customers.

Preference of
Female Male Total
cars
Toyota Prado 70 213 283
Toyota Yaris 150 117 267
Total 220 330 550

a. Based on the information given complete the row percentage cross tabulation below (up to two
decimal places). (3 Marks)

Preference of cars Female Male Total

Toyota Prado 24.73 75.27 100.00

Toyota Yaris 56.18 43.82 100.00

Total 40.00 60.00 100.00

Answer the following questions based on your calculations

b. Is there a relationship between ‘Gender’ and ‘preference’? (1 mark)

Comparting the percentages across the rows we can see a great difference between categories.
For example the percentage of female preference for Prados is 24.73% and male preference is
75.27%. Also, the female preference for Yaris is 56.18% and male preference was 43.82%.
This means that there is a relationship between gender and preference of cars.
2.1
c. Toyota Australia has also collected data for ‘Number of vehicles on the road at a given time’ and
‘road accidents’.

Out of the two variables, recognise the ‘Explanatory’ (Independent) variable and ‘Response’
(Dependent) variable. (1 mark)

Explanatory variable: Number of vehicles on the road at a given time

Response variable: Road accidents

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2.2 Toyota Australia has introduced a new navigator called ‘Austoy’ and found that the customer
demand (units per month) for the new brand is normally distributed with mean = 410 and
standard deviation = 30
a. Find the probability that demand will be at most 500 units/month (1.5 marks)

(Draw diagrams if necessary)

𝑋−µ 500−410
Z= 
≤ 30
= 3 (0.5 marks)
Use the Table E.14 given in Moodle to find the corresponding value for 3.00
= 0.49865 + 0.5 = 0.99865

2.2

b. Find the probability that;

I. Demand will exceed 300 units/month (1.5 marks)

𝑋−µ 300−410
Z= = = -3.67 (0.5 marks)
 30
Use the Table E.14 given in Moodle to find the corresponding value for -3.67 = 0.49988 (0.5 marks)
0.49987 + 0.5 = 0.99988

Probability that demand will exceed 300 units, or P(X > 300) = 0.99988 (0.5 marks)

II. Demand will be between 300 and 500 units/month (2 marks)

P(300 < X < 500) (0.5 marks)

𝑋−µ 300−410 500−410

Z= = <Z< (0.5 marks)
 30 30

From previous calculations: P(Z<500) = 0.49865 and P(Z>300) = 0.49987

(0.5 marks)
P(300 < X < 500) = 0.49865+0.49987 = 0.99852 (0.5 marks)

OR

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From previous calculations: P(Z<500) = 0.99865 and P(Z>300) = 0.99988 (for this question we
need P (Z<300) so subtract 0.49987 from 0.5 = 0.00013 (0.5 marks)

P(Z<500) – P(Z<300) = P (300<Z<500) = 0.99865 – 0.00013 = 0.99852 (0.5 marks)

Probability that demand will be between 300 and 500, or P(300 < Z < 500): = 0.99852
2.3
a. A consumer group is asked to run a customer satisfaction survey about the Toyota customer
service. They have picked 50 customers and found, 32/50 (64%) satisfied with the service they
received. Construct a 95% confidence interval for the true proportion of customers who are
satisfied with the service.

Sample proportion: p = 0.64n = 50

1. PROPORTION
Use Z-scores

2. Find Z-score:
95% confidence: z = 1.96

Calculate confidence interval (CI):

𝑝(1−𝑝) 0.64×(1−0.64)
𝑝 ± Z ∝/2√ = 0.64 ± 1.96 × √
𝑛 50

= (0.64 – 0.13305) to (0.64 + 0.13305)

= 0.5070 to 0.7730
= 50.7% to 77.3%
We are 95% confident that the true proportion of all customers who are satisfied with the
service is somewhere in the range of 50.7% to 77.3%

b. If the consumer group was to conduct another survey in the future, what sized sample would be
required if they wish to have a margin of error of at most 5% and maintain a 90% confidence
level with an estimated population proportion of 64%?

Estimate of population proportion (π): p = 0.64

Desired Margin of Error (ME): ME = 0.05
90% confidence: z = 1.645
𝑍2 ∗𝑝∗(1−𝑝) 1.6452 ∗0.64∗(1−0.64)
𝑛= 𝑀𝐸 2
= 0.052
= 249.39 = 250

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Question 3 - This question contains 5 parts
[3+1+3+1+2] = 10 Marks

1.1 Management of Swan Tyres, a tyre manufacturing company is concerned about the variation in
tyre sales, and suspects that the below average advertising in regional areas may play a vital
part in this problem. They have generated the regression output below.

a. Using the regression model in the summary output, predict the Tyre sales for the following
scenario:
Competitor impact rate = 47, Regional advertising expense (in ‘000) = $80, Tyre price = $300 (3
marks)
Sales ($) = 102.51 + (0.003 x Competitor impact) + (0.953 x Regional advertising expense) +
(0.446 x Tyre prices)
Sales = 102.51 + (0.003 x47) + (0.953 x 80) + (0.446 x 300) = 312.691 OR $312,691

b. Interpret the intercept? (1 mark)

Intercept: 102.51
When competitor impact, regional advertising expenses and Tyre prices are ’zero’, the tyre
sales will be on average $102.51
This is meaningless as there will be no sales if the price is zero.

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Question 3 continued

3.1

c. Comment on the explanatory power of the model (use R2). (3 marks)

R2 : 71.14%
71.14% of the tyre sales is explained by the joint variation in competitor impact, regional
advertising expense and tyre prices.
The remaining 28.86% is left unexplained due to the factors influencing sales but not included
in the model.
This model is a strong model for predictions.

d. Referring to the given regression analysis, do you think that R2 is a better measure than adjusted
R2 to comment on the explanatory power? Provide reasons. (1 mark)

If we include any additional independent variable(s) to the model, R2 will increase regardless
of whether the variable is important/significant to the model. But the Adjusted R2 takes the
number of independent variables into account. So adjusted R2 is a better measure.

e. Interpret the coefficient for regional advertising expense 0.953. (2 marks)

Given that the other independent variables are held constant, when advertising expense
increases by $1 the sales will increase by on average $953

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Question 4 - This question contains 6 parts
[2+1+1+1+2+3] = 10 Marks

A retailer of toy cars wants to know how many damaged toys are there in a delivery of 500 ‘Hot
wheels’ toy cars. A random sample of 50 toys were checked.

Based on previous history, the retailer claims that his expectation is to see at least 20% of the toy
cars would be damaged.

Of the 50 toys checked, 22% of the toys were damaged.

You are asked to use the ‘6 Step’ process to test the retailer’s claim (or “hypothesis”) that at least
20% will be damaged.

c. Step 1: Write down in symbols and words the null and alternative hypotheses. (2 marks)
H0 : π ≥ 20% (Proportion of all toy cars that will damage is at least 20%)
H1 : π < 20% (Proportion of all cars that will damage is less than 20%)

d. Step 2: State the type of test you are conducting. (1 mark)

Lower Tail

c. Step 3: Using a level of significance (α) of 5%, determine the critical value(s). (1 mark)
α = 5%; Critical Value of Z =-1.645 (From Confidence Intervals/Hypothesis Tests: Z ScoresFile
in Moodle)

d. Step 4: Write your decision rule. (A diagram may be helpful). (1 mark)

If the Test Statistic (from Step 5) is less than the Critical value of Z(-1.645), REJECT H0

Test statistic < Critical value REJECT H0

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Question 4 continued

e. Step 5: Calculate your test statistic. (2 marks)

Calculation area:

0.22 − 0.20
= +0.3536
√0.20(1 − 0.20)
50

f. Step 6: State your decision and conclusion.

Decision: (1 mark)
Since the Test Statistic (z=+0.3536) is greater than the critical value of z(-1.645), DO NOT
REJECT H0.
Conclusion: (2 marks)
The retailer’s claim that at least 20% of the toy cars would be damaged seems to be correct.

END OF PRACTICE EXAM PAPER 2

MIS171/MISP171 Business Analytics PRACTICE EXAM PAPER 2 Page 13 of 13