6002 Business Analysis

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Data analysis reportDivine Elegance: A RestaurantTable of Contents

Introduction ........................................................................................................................................... 2

Preliminary Analysis ............................................................................................................................... 2

Data Screening and Hypothesis Testing ................................................................................................... 21. How much are potential patrons willing to pay for the entres? Is the $18 amount from the forecasting modelcorrect? ................................................................................................................................................................................................................. 22. Can Michael expect all patrons to spend an average of $200 a month on food? ..................... .................... ..................... . 43. Which zip code area(s) provide the best location for the restaurant? Does the expected average monthlyspend differ between potential patrons residing in different zip codes .................... .................... ..................... ..................... . 64. Does the likelihood to patronize the restaurant different between people with different income levels? ........... 85.How elegant should the dcor be? Would potential patrons prefer simple or elegant dcor? ................................... . 9

6. Should there be live entertainment? Would potential patrons prefer a string quartet or a jazz combo? ........... 107. Which radio station(s) should Michael select for advertising? Which type of radio programming do peoplemost likely to patronize the restaurant listen to? ............................................................................................................................ 10 8. Can the likelihood of patronizing the restaurant be explained in terms of evaluations on restaurantpreference variables (Variables 11-20), age, family size and gender when all of these variables are consideredsimultaneously? (*Hint, you may need to recode the Year Born variable to determine age)...................... ............... 119. Does the average age between a probable and non probable patron differ? .................... .................... ..................... ..... 1310. Is there a relationship between gender and whether or not someone is a probable patron? ................... ............ 14

Conclusion and Recommendation ......................................................................................................... 15

Appendix A ........................................................................................................................................... 17

Categorical ........................................................................................................................................................................................................ 17Quantitate ......................................................................................................................................................................................................... 24


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IntroductionMichael Jenkins wants to open his own dream restaurant. Before open his restaurant, he has some

concerns, firstly, he want to know is there demand for an upscale restaurant. Secondly, he wants to know

how to design and what are the operating characteristics. Thirdly, the location of the restaurant will be

recommended. Lastly, the methods to promote the restaurant will be given. In order to give the decision

to Michael, the report will use different statistical methods to explore the data collected from survey and

help Michael to make decisions. After the data analysis, the conclusion and recommendation will be given

to Michael.

Preliminary AnalysisThe frequencies for categorical variables and descriptive statistics for variables are shows in appendix A.

According to the frequencies for categorical variables, we find that all the people in the survey went to this

type of restaurant at least once every two week with moderate likelihood to patronlize this restaurant. In

the radio section, almost all the customers listen to the radio and rock music are they favorite. In the TV

section, the customers like 10:00 pm news. Also they like local news section in the newspaper. For the

operating characteristics, they somewhat prefer the waterfront, like simple dcor, prefer the restaurantnot too fat from home. And not prefer large variety of Entrees and unusual entrees. In the consumers

characteristics section, Almost 60% customers have bachelors degree and more than half are married with

income range from $50,000 to $74,999.

The preliminary analysis give the general idea from the customers, however, the deeper statistical test

need to conduct in order to get the deeper understanding with the customers.

Data Screening and Hypothesis Testing

1. How much are potential patrons willing to pay for the entres? Is the $18 amount from the

forecasting model correct?

The data present very well in this question, we assume that the populations are normally distributed.

1. State the null and alternate hypothesesH0:

Ha:


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2. Choose an appropriate statistical technique to test the hypothesis

One sample t-test is used to test the hypothesis because the variable is independent and the one sample t-

test compares the mean score of a sample to a known value.

3. Provide a summary of the nature (characteristics) of the test selected

Reject null hypothesis is p value less than 0.05.

4. Perform the appropriate test using SPSS

5. Report the results (including test statistic and p-value)

The t value is 1.567 and the p-value is 0.118

6. Include appropriate graphical representation of the results (if appropriate)


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7. Provide a suitable description for the graphical output

The distribution is skewed to the right. The average amount of patrons willing to pay is $18.8353.

8. Provide a statistical interpretation

P value is 0.118 is greater than the critical value of 0.05. Do not reject null hypothesis. There is sufficient

evidence to shows that the potential patron willing to pay for the entrees is $18.

9. Provide a non-statistical interpretation (in laymans terms)

The potential patrons willing to pay $18 for the entre, the best price strategy for entre should be greaterthan $18.

2. Can Michael expect all patrons to spend an average of $200 a month on food?


1. State the null and alternate hypotheses


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H0:

Ha:


One sample t-test is used to test the hypothesis because the variable is independent and the one sample t-

test compares the mean score of a sample to a known value.

3. Provide a summary of the nature (characteristics) of the test selectedReject null hypothesis is p value less than 0.05.


5. Report the results (including test statistic and p-value)The t value is -10.775 and the p-value is 0.000




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The distribution is skewed to the right. The average amount spend per month in restaurants is $150.05


P value is 0.000 is less than the critical value of 0.05. Reject null hypothesis. There is insufficient evidence

to shows that all patrons to spend an average of $200 a month on food.


The potential patrons spend on average is not equal to $200, may be less than $200. Michael should do amarketing research, is this area suitable for the upper class restaurant.

3. Which zip code area(s) provide the best location for the restaurant? Does the expected

average monthly spend differ between potential patrons residing in different zip codes



H0:

Ha: at least one mean is significantly different


One way ANOVA method is chosen because its data is more than two independence means.





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The F value is 313.333 and the p-value is 0.000



As can be seen in the graph, the people live in postcode B spend higher than the other postcode area.


P value is 0.000 is less than the critical value of 0.05. Reject null hypothesis. There is sufficient evidence toshows that at least one mean is significantly different.



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General speaking, the people live in postcode B spend higher than the other postcode area. Michael can

locate his restaurant in this area.

4. Does the likelihood to patronize the restaurant different between people with different

income levels?


H0: Ha: at least one mean is significantly different


One way ANOVA method is chosen because its data is more than two independence means.







P value is 0.000 is less than the critical value of 0.05. Reject null hypothesis. There is sufficient evidence to

shows that at least one mean is significantly different.

7. Provide a non-statistical interpretation (in laymans terms)General speaking, the likelihood to patronize the restaurant increase as the peoples income levels

increases.


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5.How elegant should the dcor be? Would potential patrons prefer simple or elegant dcor?

From the histogram, we can know that the people prefer simple dcor more than elegant dcor. A SPSSanalysis as following.


H0: the level of preference over simple style = the level of preference over elegant style

Ha: the level of preference over simple style the level of preference over elegant style


Paired test




5. Report the results (including test statistic and p-value)The t value is 8.564 and the p-value is 0.000



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shows that the level of preference over simple dcor is not the same as the level of preference over

elegant dcor.


The people prefer simple dcor more than elegant dcor, Michael can use this information to set up the

new restaurant.

6. Should there be live entertainment? Would potential patrons prefer a string quartet or a jazz

combo?


H0: the level of preference over String Quartet is equal to the level of preference over Jazz Combo

Ha: the level of preference over String Quartet is not equal the level of preference over Jazz Combo


Paired test





The t value is -10.30 and the p-value is 0.0006. Provide a statistical interpretation


shows that the level of preference over String Quartet is not equal the level of preference over Jazz

Combo.


There is a difference in likelihood between the string quartet and the jazz combo. The live entertainment

should choose the jazz combo for the restaurant.

7. Which radio station(s) should Michael select for advertising? Which type of radio

programming do people most likely to patronize the restaurant listen to?1. State the null and alternate hypotheses


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H0: Average likelihood in Country &Western = Easy Listening = Talk or News = Rock

Ha: At least type of the likelihood is significantly different


ANOVA

3. Provide a summary of the nature (characteristics) of the test selectedReject null hypothesis is p value less than 0.05.






shows that there are significant differences between Country &Western, Easy Listening, Talk or News and

Rock. In addition, the mean for the Easy listening is the highest.


Easy listening radio station should Michael select for advertising. This also the type of radio programming

do people most likely to patronize the restaurant listen to.

8. Can the likelihood of patronizing the restaurant be explained in terms of evaluations on

restaurant preference variables (Variables 11-20), age, family size and genderwhen all of

these variables are considered simultaneously? (*Hint, you may need to recode the Year Born

variable to determine age).


H0: All the coefficients are the same

Ha: At least one coefficient is not the same



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Regression





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shows that there are significant differences between coefficients. Also, the coefficients for each variable,

we can find that in the regression model. For example, the coefficient for slope is 1.396, the coefficient for

prefer waterfront view is 0.189.


Michael can use the regression model to predict the likelihood of patronizing the restaurant. The data fit

the model very well.

9. Does the average age between a probable and non probable patron differ?


H0: Average age of probable patron = Average age of non probable patron

Ha: Average age of probable patron Average age of non probable patron


Independent t test





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The t value is 11.414 and the p-value is 0.000



shows that the average age between a probable and non probable patron differ.

7. Provide a non-statistical interpretation (in laymans terms)There is difference between probably and no probably Patrons in average ages, therefore, Michael should

consider for the age group.

10. Is there a relationship between gender and whether or not someone is a probable patron?


H0: there is no relationship between gender and probable patron

H1: there is a relationship between gender and probable patron


Chi square test





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The chi-square value is 0.285 and p-value is 0.593 in the chi-square test


P value is 0.593 is higher than the critical value of 0.05. Do no reject null hypothesis. There is insufficient

evidence to shows that there is a relationship between gender and whether or not someone is a probablepatron


There is no relationship between gender, therefore, Michael do not need to consider about the gender in

order to patron of the new restaurant.

Conclusion and RecommendationFrom the data analysis, the main aim is to help Michael make a decision for the new restaurant, thereare some recommendations, firstly of all, the price for the entre should be around $18 along with the


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patrons spend less than $200 monthly for the meal. The best location for the restaurant is the Postcode area B, Michael should use simple dcor for the new restaurant, and Jazz band for the live musicshould be considered. Further, the patrons like easy listening music, Michael should consider to selectthis for advertising in the radio. Lastly, the average age between a probable and non-probable patronare differ but there is no relationship between genders.

Overall, the data analysis is useful for make decision and the output is useful for Michael. Based on therecommendation, Michael will succeed and realise his dream.


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Appendix A

Categorical


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Quantitate

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6002 Business Analysis