Introduction to Business Statistics
Chapter 6 Case
Cases are assigned from the end of selected chapters that represent real world applications of the
statistical concepts discussed in the chapter. You will use Microsoft Excel to perform the statistical
procedures. You will also use Microsoft Word to create a managerial report that summarizes the key
requirements of the case, explains the statistical methods used, discusses the results, and recommends
a course of action based on your analysis.
o Use format available in Course Documents;
Section 1 summarizes the case described in the chapter. DO NOT copy the case.
Section 2 should describe the statistical methods used to analyze the case.
Include descriptive statistics, interval estimates, hypothesis tests and charts as
necessary. DO NOT include the data set in the report. Figures and tables should
be labeled (Table 1. Descriptive statistics, Figure 1. Chi-square distribution, etc.)
and properly formatted for clarity.
Section 3 should provide the conclusions of your analysis and recommendations
for future action.
o Use separate sheet for each chart, pivot table, and table created with the Analysis Tool-
o Name each tab with the name of the table or chart.
o Format numbers to 3 decimal places.
Student Learning Outcomes
In completing the assigned cases the student will:
Demonstrate the ability to use Microsoft Excel to perform statistical operations using formulas,
statistical functions, charts, pivot tables and other analysis tools;
Use tabular and graphical methods to develop and present descriptive statistics;
Critically analyze data to make recommendations to decision makers; and
Demonstrate understanding of statistical methods and concept through discussion in the
The attached rubric is used to grade each case study:
Spreadsheet – Demonstrate ability to use Microsoft Excel to perform statistical analysis.
o Use of analysis tools and pivot tables;
o Use of charts and graphs;
o Use of formulas and functions.
Managerial Report – Demonstrate understanding of statistical methods.
o Use proscribed format and headings in your report
o Provide a clear and focused summary of the case
o Critically analyze data
o Make logical recommendations supported by statistical analysis
o Use proper punctuation, spelling and grammar. Tables and charts should be properly
identified, formatted, and referenced in the document
Specialty Toys Pg 281
Data File: none
Recommend order quantity for the Weather Teddy product.
1. Use the sales forecaster’s prediction to describe a normal probability distribution that can be
used to approximate the demand distribution. Use StatTools to draw the distribution – show
mean and standard deviation.
2. Compute the probability of a stock-out (sales exceeding order quantity) for the order quantities
suggested by members of the management team.
3. Compute the projected profit for the order quantities suggested by members of the
management team under three scenarios: Worst case (sales = 10,00 units); Most likely case
(sales = 20,000 units); Best case (sales = 30,000 units).
4. One of Specialty’s managers felt that the profit potential was so great that the order quantity
should have a 70% chance of meeting demand and only a 30% chance of any stock-outs. What
quantity would be ordered under this policy, and what is the projected profit under the three
5. Provide a recommendation for an order quantity and note the associated profit projections.
Discuss the rationale for your recommendation.