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# Academic approach to Case study

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The ThermoStar Case

ThermoStar has been producing residential thermostats for over 50 years.

Looking over the past 20 quarters (5 years) of the different product lines, the general manager has been trying to get a handle on sales, costs, and production, and has asked for your help. Your response to the general manager will be in three parts:

2. A PowerPoint presentation of 3 - 5 slides that shows some key graphs and includes a slide of your recommendations, and
3. A two to three word document page report on the situation that addresses the company's operations, cites your analysis, and provides recommendations.

You need to use the data to describe the business, plus give your personal recommendations on what the business seems to be doing right, what needs to change, and/or what the manager might need to be concerned about. Direct this report to the General Manager and write it with the intention that the general manager will view your complete product as your deliverable, that is, your report should include analysis from your Excel and PowerPoint analysis. Assume that the Excel and Power Point analysis are "attachments" that provide evidence to the GM in your narrative.

Instructions:

Answer the following five questions using Excel and refer to your datasheet. Make sure your answers include all the data required and are easily accessible.

1. Calculate the descriptive statistics (summary statistics) for total sales (in K units). Show the Descriptive Statistics as your output on the Excel sheet.

2. Using the unit data by product line, compile a breakdown of sales by product line.
What percentage of the total sales is for each product line?
Also, currently the sales total equals 528,000 units.
If the sales total was changed to 100,000 total units, how many units will Alpha, Beta, and Gamma have?

3. ThermoStar tests thermostats so they are calibrated with a mean of 70 degrees, with an associated standard deviation of 2 degrees. Given this mean and standard deviation what percentage of thermostats will test below the inspector's cutoff value and thus need to be recalibrated? (See the data sheet for the cutoff and assume that the test results are normally distributed.)

4. A sample of 40 employees shows the mean time spent in training per year to be 40 hours, with the associated standard deviation as noted in the datasheet. Construct a 95 percent confidence interval around the mean presenting both the upper and lower limits (+/-).

5. We want to predict total costs, and we know the number of units produced. Do a simple linear regression to predict the total costs. What is your dependent variable? What is your independent variable? Write the regression equation showing the relationship between the independent and dependent variables. Also, use the R2 and t-statistic to tell me if this model is suitable for business decision making? If so, why? If not, why not? (Hint: copy and paste special, transpose the data into columns, then run the regression tool.)

PowerPoint

Narrative Report

See the description (above). Submit it as a Word file. Make sure you create a professional looking report, addressed to the General Manager.

#### Solution Preview

See attached files.

Answer the following five questions using Excel and refer to your datasheet. Make sure your answers include all the data required and are easily accessible.

1. Calculate the descriptive statistics (summary statistics) for total sales (in K units). Show the Descriptive Statistics as your output on the Excel sheet.

I calculated summary statistics for total sales. The table is in the Excel file and below.

Summary Statistics for Total Sales (K units)

Total sales for all quarters 528
Average sales per quarter 26.4
Median sales per quarter 27
Standard deviation of sales per quarter 3.346640106
Minimum sales per quarter 18
Maximum sales per quarter 31

These are standard summary statistics. If you use others measurements in your statistics class, let me know.

2. Using the unit data by product line, compile a breakdown of sales by product line.
What percentage of the total sales is for each product line?
Also, currently the sales total equals 528,000 units.
If the sales total was changed to 100,000 total units, how many units will Alpha, Beta, and Gamma have?

The current total is 528,000 units. By product line, the total ...

#### Solution Summary

The solution examines multiple case studies.

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