Hallstead Jewelers What have we done? Daddy would know what to do, but I don't. I really thought growing this business would be an easy thing for us, but now I am not so sure. All of the work that we did in 2005 was supposed to set us up for new success, profits, and a bright future. But now, we are showing losses on both the historical investment and on our modernization and expansion. Gretchen Reeves was talking in early February 2007 with her sister and partner Michaela Hurd after receiving preliminary income statements for Halstead Jewelers for fiscal year 2006 which had ended January 31, 2007 (See Exhibit 1). In a new building, just renovated in 2005, with 50% more space and selling staff than ever before, the business had experienced a loss almost double the income of the last "normal" year, 2004. To Gretchen, this did not bode well for the future. The sisters' grandfather established Hallstead Jewelers 83 years earlier in the largest city in the tri-state region. For more than 50 years, until his death, he had nurtured and grown the original store from a start up to one of the largest jewelry and gift stores in the United States. Four departments sold almost everything that customers expected in a jewelry and gift store: fine jewelry and gems, watches, tabletop gifts (china and flatware), and artistic gifts. Customers came from throughout the region to buy from extensive collections in each department. Any gift from Hallstead's had an extra cache attached to it. It was presumed to be the best. When Grandfather died, the store was left to his only son, who had literally grown up in the store to become his father's partner in the business. That son was the father of both Gretchen and Michaela. Another child, their brother James, had shunned the business to study medicine and surgery. The girls, however, followed in their father's footsteps and grew up in the store, learning the business. At the death of their father in 2002, the three children inherited the business as equal partners, and by agreement with James, Gretchen and Michaela took over the management of the business and store. At the time of the sisters' assumption of the ownership and management of the store, it was still operating in the original store location on Lake Avenue and Second Avenue. In the late 1930's, Lake Avenue became the most important retail location in the city. The store was improved and provided elegant space for the display and sale of their products. It was a destination-shopping place. The store was remodeled and redecorated again after the founder died, but the location and space remained the same until 2004.

In the meantime, the principal retail shopping areas shifted two blocks west to Washington Street. Stores were larger there and could accommodate department stores and larger specialty retailers. But reputation and selection still brought customers to Lake Avenue for the selections at Hallstead's. Shopping centers were developed in suburban locations, but Hallstead Jewelers stayed put. The sisters’ father saw the changes in the retail landscape, but he took no action because of them. Hallstead's was a one-store seller at its original location, in many ways an anachronism. By the time the sisters assumed management, there were signs that it might be time for changes. Sales had been stagnant since 1999 or so, and profits were slipping. One of the sisters' first ideas was to look for another or several locations. A consultant said that they needed more space and a fresh store look. Expansion was impossible without moving, and although a move might entail some risk, he recommended that they look toward a larger location on Washington Street. They made some changes in product offerings that offered more sales potential at the cost of minor reductions in margins. In 2004 a large toy seller with more space abandoned the corner of Washington Street and Second Avenue. The sisters wasted no time in signing a new five-year lease and starting extensive and expensive renovations. Since the new store was only two blocks from the original location, Gretchen and Michaela were confident that their loyal customers would find and follow them. Renovations and moving took most of 2005, and they started 2006 in the new store. They laughed about 2005 being a "lost" and "loss" year, but they were sure 2006 would bring a new day to Hallstead's. The retail jewelry business was changing. Tiffany & Company, a business with an origin much like Hallstead Jewelers, had grown into an international powerhouse. With their "blue boxes" they had become the largest diamond seller in the United States. At the same time, a start- up internet seller named Blue Nile, founded in the infancy of the World Wide Web a decade earlier was the second largest diamond seller in the United States. The sisters had not had time to think about what those trends meant for Hallstead's. But as fiscal 2006 ended and the preliminary income statement was in, both Gretchen and Michaela knew something more had to be done. They wanted to figure out what had happened between 2004 and 2006, and they wanted to explore ideas about changes in strategy that would return the business to profitability and a brighter future. Their accountant suggested that the move to a new location had changed the economics of their business somewhat, and that further changes in promotion might be in order. Increasing advertising might bring in more customers, or changing pricing formulas to fend off new internet jewelry competitors might be considered. The sisters put together some questions that they asked the accountant to analyze for them using some additional operating statistics that they had at hand (Exhibit 2).

Exhibit 1 Hallstead Jewelers; Income Statements for Years Ended January 31 (thousands of dollars) 2003 2004 2006 Sales $8,583 $8,102 $10,711 Cost of goods sold 4,326 4,132 5,570 Gross margin $4,257 $3,970 $ 5,141 Expenses Selling expense Salaries 2,021 2,081 3,215 Commissions 429 405 536 Advertising 254 250 257 Administrative expenses 418 425 435 Rent 420 420 840 Depreciation 84 84 142 Miscellaneous expenses 53 93 122 Total expenses $3,679 $3,758 $ 5,547 Net income $ 578 $ 212 $ (406)

Exhibit 2 Hallstead Jewelers Operating Statistics 2003 2004 2006 Sales space (square feet) 10,230 10,230 15,280 Sales per square foot $ 839 $ 792 $ 701 Sales tickets 5,341 5,316 6,897 Average sales ticket $ 1,607 $ 1,524 $ 1,553.

1. Prepare the breakeven point for the years 2003, 2004 and 2006. Calculate the Margin of Safety for each of the years?

2. The following proposals are included the discussion questions of the case (refer to questions 2, 3 and 4 for more details):

a. The Consultant: Reduce price to increase traffic. Reduction in price of 10% will bring the number of tickets to 7,500.   

b. Gretchen: Eliminate sales commission.

c. Michaela: Increase Advertising by $200,000.

For each proposal, calculate operating income and breakeven point.

3. Based on your overall analysis, what market strategies should Hallstead Jewelers adopt? What combination, if any, of the proposals should they consider? Reminder, you cannot assume that they can magically go back to how things were on 2004.

4. What other non-financial business aspects should Hallstead Jewelers consider as part of their strategy for 2007?

Personal Budget

At the beginning of the school year, Craig Kovar decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget:

a. Prepare a cash budget for September, October, November, and December. Use the minus sign to indicate cash outflows, a decrease in cash or cash payments.

Feedback

b. Are the four monthly budgets that are presented prepared as static budgets or flexible budgets?

Static

c. What are the budget implications for Craig Kovar?

Craig can see that his present plan will not provide  sufficient cash. If Craig did not budget but went ahead with the original plan, he would be $ ________ short  at the end of December, with no time left to adjust.

Refer to the Buena School District bus data ( 2012). Select the variable referring to the number ofmiles traveled last month, and then organize these data into a frequency distribution. a. What is a typical amount of miles traveled? What is the range? b. Comment on the shape of the distribution. Are there any outliers in terms of milesdriven? c. Draw a cumulative frequency distribution. Forty percent of the buses were driven fewerthan how many miles? How many buses were driven less than 850 miles? d. Refertothevariablesregardingthebustypeandthenumberofseatsineachbus.Drawa pie chart of each variable and comment on your findings

Consider the following situation. You are riding on a school bus and are juggling three oranges.Ultimately, you wish to analyze the motion of the oranges by applying Newton's laws.

a. give two conditions that must be met for the interior of the bus to be used as an inertial frame of reference

b. if the windows of the bus are covered and the road was perfectly smoooth, would you be able to determine whether or not the bus was moving? Explain?

c. if you analyzed the motion of the oranges while the bus is travelling at 60 miles per hour and again while it is standing still, would you arrive at the same answers.

d. could you get any clues from the motion of the oranges as to whether or not the bus was moving?

e. if the bus driver suddenly slammed on the brakes, slowing the bus from 60 miles per hour to a stop in a few seconds, would you be able to continue to juggle the oranges during the deaceleration of the bus?

f. During the deacceleration of the bus, would it still qualify as an inertial frame of reference.

2. Consider juggling a set of three oranges while seated on a merry-go-round. Would it be possible to analyze the motion of the oranges within the context of an inertial frame of reference?

3. Consider standing on the surface of the earth and juggling three oranges. Since the earth is rotating and orbiting the sun, is it possible to analzye the motion of the oranges within the context of an inertial frame of reference?

2. An educator claims that the average salary of substitute teachers in school districts in Allegheny County, Pennsylvania is less than $65 per day. A random sample of eight schools districts is selected and the daily salaries are shown below. Is there enough evidence to support the educator’s claim? Perform the appropriate hypothesis test using a significance value of 0.05.

.

            65        68        64        63        65        59        63        58       

Find the p-value for the above hypothesis test.

What do you conclude using the p-value?

If you pay more in tuition to go to a top business​school, will it necessarily result in a higher probability of a job offer at​ graduation? Let y=percentage of graduates with job offers and x=tuition ​cost; then fit the simple linear​ model, E(y)=β0+β1x​, to the data below. Is there sufficient evidence​ (at α=0.05) of a positive linear relationship between y and​ x?

Give the null and alternative hypotheses for testing whether there exists a positive linear relationship between y and​ x?

A.H0​: β0=0

Ha​:β0≠0

B.H0​: β1=0

Ha​:β1≠0

C.H0​: β0=0

Ha​: β0>0

D.H0​: β0=0

Ha​: β0<0

E.H0​: β1=0

Ha​: β1<0

F.H0​: β1=0

Ha​:β1>0

Find the test statistic.

t=_________

​(Round to two decimal places as​ needed.)

Find the​ p-value.

​p-value=_________

​(Round to four decimal places as​ needed.)

Make the appropriate conclusion at α=0.05.

Choose the correct answer below.

A.Reject H0. There is sufficient evidence that there exists a positive linear relationship between y and x.

B.Do not reject H0. There is sufficient evidence that there exists a positive linear relationship between y and x.

C.Do not reject H0. There is insufficient evidence that there exists a positive linear relationship between y and x.

D.Reject H0. There is insufficient evidence that there exists a positive linear relationship between y and x.

Personal Budget

At the beginning of the school year, Katherine Malloy decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget:

a. Prepare a cash budget for September, October, November, and December. Enter all amounts as positive values except an overall cash decrease which should be indicated with a minus sign.

b. Are the four monthly budgets that are presented prepared as static budgets or flexible budgets?

c. Malloy can see that her present plan   sufficient cash. If Malloy did not budget but went ahead with the original plan, she would be $   at the end of December, with no time left to adjust.

2.In a high school, 16% are Freshmen, 14% are Sophomores, 38% are Juniors, and 32% are Seniors. Suppose 15 students are randomly selected. Find the probability that

a) 4 are Freshmen, 5 are Sophomores, and the rest are neither Freshmen nor Sophomores (in any order)

b) either exactly one is Senior and all the others are not Senior (in any order) or exactly one Freshman, one Sophomore, one Junior and all the others are Seniors ( in any order)

Note: For each part, just give the formula as an answer; numerical answer is not required.

3. If seven fair dice are rolled, what is the probability that the number 2 and the number 6 will appear the same number of times?

(Note: “Same number of times” includes both 2 and 6 not appearing at all)

A school district has a standardized test that it uses to sort students into magnet schools, where the test is on a 200-point scale. The superintendent is looking to determine whether male and female students have approximately equal scores on the test. The scores for a random sample of 20 male students and 20 female students are recorded. Assume that the population variances of scores for male and female students are equal and that the scores are normally distributed for both male and female students. Let the male students be the first sample, and let the female students be the second sample.

The superintendent conducts a two-mean hypothesis test at the 0.05 level of significance, to test if there is evidence that male and female students have different scores, on average.

For this test: H0:μ1=μ2; Ha:μ1≠μ2, which is a two-tailed test.

The above table contains scores for a random sample of 20 male students and 20 female students.

Use a TI-83, TI-83 Plus, or TI-84 calculator to test if there is evidence that male and female students have different scores, on average. Identify the test statistic, t, and p-value from the calculator output. Round your test statistic to two decimal places and your p-value to three decimal places.

test statistic =? , p-value = ?