Providing Advice to Michael Jenkins Who Is a Restaurant Supply Sales Representative - Assignment Example

Introduction This report is aimed at providing advice to Michael Jenkins who is a restaurant supply sales representative and is planning to open his own restaurant. It consists of ten detailed analysis of the various variables of interest with the aim of giving proper advice to him on the factors to be considered for him to open a fine, upscale restaurant featuring the finest entrées, drinks, and desserts in an elegant atmosphere. The report will enable him to make wise decisions on the design of the restaurant, the willingness to pay price for an upscale entree and the best location among many others. Question 1: How much are potential patrons willing to pay for the entrées? Is the $18 amount from the forecasting model correct? The null hypothesis: H0=$18 Alternative hypothesis: H1≠$18. A one sample t-test was used to test the hypothesis The one sample t-test is usually carried out on normally distributed interval variables (Denis, 2012). A one sample t-test is used to test whether a sample mean of a normally distributed continuous variable is significantly different from the hypothesized value. In this case, we wish to determine if the average willingness to pay price for an à la carte entrée significantly differs from $18. The figures below show that the mean price of the evening meal entree for this study was found to be $ 18.84 and the p-value was 0.118 at 339 degrees of freedom. Since p-value is greater than 0.05 (p>0.05) then the null hypothesis is not rejected. This shows that the sample was drawn from a population such that the mean price that the people are willing to purchase an à la carte entrée was $18. The 95% confidence interval of the difference shows a range of $-.2131 to $ 1.8837which is inclusive of zero hence providing evidence that the null hypothesis should not be rejected. Therefore the $18 amount from the forecasting model was correct. One-Sample Statistics N Mean Std. Deviation Std. Error Mean What would you expect an average evening meal entree item alone to be priced? 340 $18.8353 $9.82784 $.53299 One-Sample Test Test Value = 18 t df Sig. (2-tailed) Mean Difference 95% Confidence Interval of the Difference Lower Upper What would you expect an average evening meal entree item alone to be priced? 1.567 339 .118 $.83529 $-.2131 $1.8837 Question 2: Can Michael expect all patrons to spend an average of $200 a month on food? Null hypothesis- H0=$200 Alternative hypothesis- H1≠$200 One sample t-test was used to test the hypothesis The one sample t-test is usually based on the assumption that the variables are normally distributed. It tests whether a sample mean of a normally distributed continuous variable is significantly different from the hypothesized value. In this case, we wish to determine if total dollars spent per month in restaurants by an individual significantly differs from $200. The figures below show that the total dollars spent per month in restaurants by an individual were $ 150.05 and the p-value was 0.000 at 339 degrees of freedom. Since p Read More