Paper, Order, or Assignment Requirements

1. Your Assignment should be presented as a business report and the format should be as follows
   • Content Page
   • The Business Problem
   • The Analytical Problem
   • Analysis
   • Conclusions and Implications

   2. Before you start your assignment, read carefully the case description that follows and write down important points. Prepare an analysis plan for this assignment. Do not rush to the computer without knowing what is required in the assignment.

TBS 910:  Business Analytics

Assignment No. 3

1. Your Assignment should be presented as a business report and the format should be as follows (Maximum 2500 words):

• Cover Page
• Executive Summary
• Content Page
• The Business Problem
• The Analytical Problem
• Analysis
• Conclusions and Implications

2. Before you start your assignment, read carefully the case description that follows and write down important points. Prepare an analysis plan for this assignment. Do not rush to the computer without knowing what is required in the assignment.
3. Case Description:

The Morgan Marketing Research Pty Ltd is a large marketing research firm operating in Sydney and Brisbane.  Mr. Bill Morgan who has a commerce degree and working experience in advertising and marketing owns the firm.  The day to day operations of the firm, including client briefing and negotiations, are tightly controlled by Mr. Morgan.  Dr. Wood who is widely known in the area of marketing research heads the research arm of the firm.  Assume you work as a Marketing Analyst under Dr. Wood.  Monday morning, when you returned to your office, there was a message from Dr. Wood asking you to see him urgently.  You went directly to Dr. Wood’s office.  He was waiting for you.  He proceeded to tell you that there is a problem.  He is currently busy with a Carbon Tax report and he needs to spend at least one week in Canberra for Senate meetings.  Last week the company got a new research project.  He has already completed the preliminary work collecting data for the new project but someone needs to attend the client’s meetings and prepare a report.  So the job of analyzing and writing up the report is up to you.  The Client brief for the current project:  Meddicorp Company sells medical supplies to hospitals, clinics, and doctor’s offices.  The company currently markets in three regions of Australia:  The East, the West and the Northeast.  These regions are divided into many smaller sales territories.  Meddicorps’ management is concerned with the effectiveness of a new bonus program they implemented last year.  This program is overseen by regional sales managers and provides bonuses to sales people based on performance.  Management wants to know whether the bonuses paid in 2014 were related to sales (obviously if there is a relationship here, the managers would expect it to be a direct one).  In determining whether this relationship exists, management also wants to take into account the effects of advertising.  The variables to be used are:

SALES:  Meddicorp‘s sales (in 000’ of dollars) in each territory for 2014

ADV:  the amount the company spent on advertising in each territory (in 00’ of dollars) in 2014

BONUS:  The total amount of bonuses paid in each territory (in 00’ of dollars) in 2014.

Prepare a business report for Meddicorp Company that summarizes and answers the following questions:

• (5 Marks) Formulate the population regression equation
• (10 Marks) Comment on the expected signs of the coefficients for ADV and BONUS
• (6 Marks) Obtain the estimated multiple regression equation for SALES where the two predictor variables are ADV and BONUS.
• (15 Marks) Interpret the estimated coefficients and thoroughly evaluate the model.
• (6 Marks) Suppose another territory (not included in the sample) had the following values on the predictor variables: advertising expenditure is 40000$ and total bonus paid 30000$.  What is the predicted value for sales?

The management of Meddicorp feels that in addition to advertising and bonuses, two other explanatory variables may be important in explaining variation in sales.  These are

MKTSHR: the market share percentage currently held by Meddicrop in each territory and

COMPET: the largest competitor’s sales in 000’ of dollars in each territory.

• (5 Marks) Formulate the population model with the new variables.
• (8 Marks) Comment on the expected signs of the coefficients for the new variables.
• (15 Marks) Test the significance of the coefficients of the model.  Can any of the variables be dropped in this model?

4. Marking:
5. Presentation                                    4
6. Executive Summary 10
7. Business Problem 3
8. Analytics Problem                                              3
9. Analysis                                             70

(Marks mentioned next to questions above)

1. Conclusions and Recommendations 10