Question

Randy Restaurateur owns several restaurants in a large metropolitan area. His restaurants range from mid-priced casual dining establishments to a very high priced four-star restaurant. Recently, sales at his “The Tavern on Elm” restaurant have fallen off, and Randy is eager to turn things around. Randy adopted a new strategy for attracting customers to the restaurant – advertising in the Arts and Life section of the city newspaper. You have been hired as consultants to help Randy assess the effectiveness of the advertising.

Problem Details

Randy has been running the ads for 15 weeks at a cost of $50 per week. He has provided you with weekly gross sales figures for the 15 weeks after the campaign began and the weekly gross sales figures for the 24 weeks immediately prior to the campaign in the data sheet titled Weekly Gross Sales. Before paying for the new advertising, profit has been 20% of the gross.

Requirements

Randy has asked for the following information related to the new advertising campaign:

• an estimate of the change in average weekly gross sales, stated to at least 95% confidence

• an assessment with 5% significance of the profitability of the ads (Do the ads more than pay for themselves?)

Complete the analysis and use a PLAN – DO – REPORT format to detail the problem, your work, and your conclusions.

During Before

$5,715.00 $4,959.00

$5,733.00 $5,788.00

$5,477.00 $5,663.00

$5,055.00 $5,146.00

$6,110.00 $5,756.00

$5,900.00 $5,307.00

$5,757.00 $5,589.00

$5,971.00 $4,442.00

$5,550.00 $5,395.00

$6,179.00 $5,911.00

$4,979.00 $5,248.00

$5,982.00 $5,350.00

$5,914.00 $5,533.00

$5,380.00 $5,814.00

$6,489.00 $4,981.00

$5,679.00

$4,873.00

$5,897.00

$5,908.00

$5,490.00

$5,300.00

$5,605.00

$4,987.00

$4,310.00

Answer 1