Question

Question 4. Fatima also wants to reward the sales manager of the branch that has performed the best during the New Year week. She has selected the top three branches with the highest sales, and will conduct Analysis of Variance (ANOVA) on the data set.

What will an ANOVA help her decide?

Branch Sales (AED '000)
Branch 1	43	39	55	56	73
Branch 2	55	58	66	79	82
Branch 3	61	66	85	86	91

Question 6:Fatima is working on the compensation package of employees, and is considering the following factors that may influence an employee’s salary.

• the average performance score of an employee;
• the number of years an employee has worked for the company; and
• the number of training hours received by the employee.

Identify the independent and dependent variables.

Question 7. The results of the correlation analysis in the Correlation Matrix these variables are depicted below. Use information in the table to discuss the strength and nature of relationship between the four variables.

	Training	Performance	Years of Service	Annual Salary
Training	1
Performance	0.016	1
Years of Service	0.377	-0.268	1
Annual Salary	0.597	0.709	0.286	1

Question 8. Results of a multiple linear regression on these four variables are depicted in the table below.

Multiple Linear Regression: Summary Output
	Coefficients
Intercept	-35.2
Training	2.5
Performance Score	8.2
Years of Service	1.1

a) Use this information to develop and interpret a Regression Equation.

b) Estimate the value of the dependent variable when an employee has attended 5 hours of training, receives a performance evaluation score of 3.6, and has been working for the company for 9 years.

Question 9. Results of the three goodness of test measures is given in the table below:

Goodness of Fit Tests
R Square	0.93		ANOVA	F	Sig F
				25.431	0.0008
	Coefficients	St.Error	t Stat	P-value
Intercept	-35.25	7.05	-4.996	0.002
Training	2.47	0.64	3.851	0.008
Performance	8.20	1.20	6.824	0.000
Years of Service	1.1	0.42	2.592	0.041

a) Do the independent variables explain a reasonable amount of variation in the dependent variable? Justify.

  

b) Can any of the independent variables be dropped from the model? Why or why not?

c) Use information in the table to comment on the validity of the model.

Question 10. What recommendation would you provide to Fatima for building the new compensation package?

Answer 1

4

ANOVA
Source of Variation	SS	df	MS	F	P-value	F crit
Between Groups	1533.733	2	766.8667	4.570123	0.033452	3.885294
Within Groups	2013.6	12	167.8
Total	3547.333	14

Since P-value is less than 0.05 we have enough evidence to conclude that the at least two Brand means are different.