The major shopping areas in the community of Springdale include Springdale Mall, West Mall, and the downtown area on Main Street. A telephone survey has been conducted to identify strengths and weaknesses of these areas and to find out how they fit into the shopping activities of local residents. The 150 respondents were also asked to provide information about themselves and their shopping habits. The data and the survey variables can be found in the attached files. Please address each of the following:
- Construct three different frequency distributions, one each for variables 7, 8, and 9. How do the three areas compare in terms of residents' general attitudes toward each?
- Do people tend to spend differently at the three areas? Construct and compare frequency distributions for variables 4, 5, and 6.
- To find out more about specific strengths and weaknesses of the areas, set up a frequency distribution for variable 10 (e.g., how many "best-fits" votes did each area get for "easy to return/exchange goods"?). Repeat this for variables 11-17 and interpret the results. Which of the malls seems to be the "bargain mall"? Which area seems to have the most convenient shopping hours?
- To find out more about the shoppers in the areas, set up a frequency distribution table to find out the number of male and female shoppers (Variable 26); the number of years each shopper has for education completed (Variable 27); and the marital status (Variable 28). Then find the average number of people in the house as well as the average age of the shopper interviewed. Interpret the results.
This solution is provided in two attached documents: a Word document and an Excel document.
An entrepreneur is considering whether to open a new computer store...
An entrepreneur is considering whether to open a new computer store. He wants to proceed cautiously since the market potential for another computer store is uncertain. His options are:
? Open a small store now
? Open a large store now
? Drop the idea now
? Have a market potential survey conducted for $5000.
The survey would suggest either a favorable or unfavorable market for a new computer store.
Based on his own preliminary calculations, the entrepreneur believes that if a small store is opened, he would earn a 1st year profit of $30,000 in a favorable market, but lose $35,000 in the 1st year in a n unfavorable market. Without the insight from the market potential survey, he believes there is a 50% chance that the market will be favorable. In initial discussions with the marketing research firm, the marketing analyst guessed there was a 60% chance that a survey would suggest a favorable market. Reluctantly, the analyst admitted that marketing surveys do not always assess markets correctly. Upon further prodding by the entrepreneur, the analyst estimated that if the survey suggested a favorable market, then the chance of the market actually being favorable was 90%. But if the survey suggested an unfavorable market, there would still be a 15% chance that the market would actually be favorable. At this point, the entrepreneur is perplexed.
1. Why do you think the decision of what to do seems difficult to the entrepreneur?
2. Construct a decision tree representing all possible actions, events and payoffs.
3. Analyze the decision tree, computing all the expected values, and recommend what the entrepreneur should do - explain completely (the grade awarded will depend on the quality of this response!!)
4. With your recommendation (from question 3), what is the best case 1st year net financial result to which he would be exposed? What is the worst case 1st year net financial result to which he would be exposed? Show all calculations and net final $$$ impact.
5. The entrepreneur has now decided that he does not want to be exposed to any 1st year net loss over $25,000. This means he no longer wants to consider opening a large store. What is your final recommendation to him now? Explain completely.