2Edgcomb Metals 21 service centers doing $500 million in sales Supplied by large steel companies35,000 customers (any firm using some kind of steel)Services include cutting, shaping, and daily delivery.
3Troy Plant 72K plant serving customers in Virginia Seven trucks, eight trailersSeven drivers$9.50 and hour with 50% for overtimeCustomized uniforms with American flag patchDaily deliveries to seven “sectors”Product for each “run” was loaded at the plant each morning in “optimum” order.Customers unload.Drivers assigned “randomly” to sectors.
4Spencer versus Williams Spencer spoke up at the most recent drivers’ meeting:We get paid by the hour with time and a half for overtime.Some of us hustle throughout the day, finish early, and help in the shop.Some of us don’t hustle and end up with overtime as a result.I want to work hard…..and it’s not right that others get rewarded for NOT working hard.
5Exhibit 2 Month TONS MILES STOPS REG HRS OT HRS Jun-83 3043 34907 719 1182362May-832889387997281259360Apr-832384333676951230382Mar-832500352887631345283Feb-832312298766131205257Jan-832678350567091253306Dec-82167827171568962187Nov-82220929917624915276Oct-82238230143713239Sep-822315347716171091272Aug-822624365237241108Jul-821745346936401030249
9Task ACalculate summary statistics for both the Williams and Spencer Data.Be prepared to present and comment BRIEFLY on the results.
10Task B Test the hypothesis that mean hours is equal for S and W. Formulate you own alternative hypothesisDo not use regressionBe prepared to report and interpret the results.
11Task C Combine (Stack) the Williams and Spencer Data. Create a dummy variable which designates driverRegress hours on the dummy variable.Be prepared to interpret the results and to test the statistical significance of the results.
12Task DTest the hypothesis that Spencer’s mean miles (per run) is equal to Williams’ mean miles.Ha: mean miles for Spencer is greater than mean miles for Williams.Be prepared to interpret the results.
13Task ETest the hypothesis that Spencer’s mean Stops (per run) is equal to Williams’ mean Stops.Ha: mean Stops for Spencer is greater than mean Stops for Williams.Be prepared to interpret the results.
14Task F For the Williams Data For the Spencer Data Regress Hours on both Miles and Stops.Be prepared to report and interpret the results.For the Spencer DataBased on your comparison of the two models, who is the better driver?
15Task G Combine (Stack) the Williams and Spencer Data. Create a dummy variable which designates driver.Regress hours on the dummy variable, Miles, and Stops.A multiple regression with three X variables.Be prepared to interpret the results and to test the statistical significance of the results.