Westar beverage sales rev. with spss slide
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WESTAR BEVERAGE SALESMULTIPLE REGRESSION
XIAOYU YANGHATIM OULADELHADJAHMEDMARIE HAYES
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EXPLORATION:TOPIC
JANE BARTLEY-STAFF ANALYST FOR WESTAR'S CORPORATE PARENT• SHE PREDICTS & ANALYZES BEVERAGE SALES
(LIQUOR, BEER, AND WINE) FOR THE CHAIN'S BUSINESS HOTELS
• FORECAST NEEDED AT THE END OF THE WEEK • OTHER FORECASTING APPROACHES INEFFECTIVE
• PREVIOUS METHODS CONSIDERED ONLY ROOM OCCUPANCY• # OF PEOPLE STAYING IMPACTS BEVERAGE
SALES• HOTEL OCCUPANCY PREDICTABLE
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EXPLORATION:HOTEL BACKGROUND INFORMATION
250-ROOM BUSINESS HOTEL LOCATED IN A RESORT AREA OF THE COLORADO ROCKIES
AVERAGE ROOMS RENTED/YR. 56,281
AVERAGE BEVERAGE SALES/MO. $24,031
HAS TWO LOUNGES ON PREMISES−POUR NOUS LOUNGE- 50 SEAT PUB-
STYLE LOUNGE−GAIETE - 200-SEAT NIGHTCLUB
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EXPLORATION:WHY USE DUMMIES?
REGRESSION ANALYSIS IS USED WITH NUMERICAL VARIABLES.
RESULTS ONLY HAVE A VALID INTERPRETATION IF IT MAKES SENSE TO ASSUME THAT HAVING A VALUE OF 2 MEANS HAVING TWICE AS MUCH OF SOMETHING AS A 1 & HAVING A 50 MEANS 50 TIMES AS MUCH AS 1.
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EXPLORATION:WHY USE DUMMIES?
SOCIAL SCIENTISTS OFTEN NEED TO WORK WITH CATEGORICAL VARIABLES IN WHICH THE DIFFERENT VALUES HAVE NO REAL NUMERICAL RELATIONSHIP WITH EACH OTHER. − EXAMPLES INCLUDE VARIABLES FOR RACE, POLITICAL
AFFILIATION, OR MARITAL STATUS.
IF YOU HAVE A VARIABLE FOR POLITICAL AFFILIATION WITH POSSIBLE RESPONSES INCLUDING DEMOCRAT, INDEPENDENT & REPUBLICAN, IT OBVIOUSLY DOESN'T MAKE SENSE TO ASSIGN VALUES OF 1 - 3 AND INTERPRET THAT AS MEANING THAT A REPUBLICAN IS SOMEHOW 3 TIMES AS POLITICALLY AFFILIATED AS A DEMOCRAT.
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EXPLORATION:WHY USE DUMMIES?
THE SOLUTION IS TO USE DUMMY VARIABLES - VARIABLES WITH
ONLY TWO VALUES, ZERO AND ONE. IT DOES MAKE SENSE TO
CREATE A VARIABLE CALLED "REPUBLICAN" AND INTERPRET IT
AS MEANING THAT SOMEONE ASSIGNED A 1 ON THIS VARIABLE
IS REPUBLICAN AND SOMEONE WITH AN 0 IS NOT.
A DUMMY VARIABLE IS ONE THAT TAKES THE VALUES 0 OR 1 TO
INDICATE THE ABSENCE OR PRESENCE OF SOME CATEGORICAL
EFFECT THAT MAY BE EXPECTED TO SHIFT THE OUTCOME. THINK
OF IT AS A TRUTH VALUE REPRESENTED AS A NUMERICAL VALUE
0 OR 1 (AS IS SOMETIMES DONE IN COMPUTER
PROGRAMMING).
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QUESTION
SHOULD OTHER FACTORS SUCH AS: −SEASON, −PROMOTIONAL FOOD OFFERED
DURING HAPPY HOUR−PRESENCE OR ABSENCE OF A PIANO
PLAYER IN THE POUR NOUS LOUNGE
BE CONSIDERED IN FORECASTING BEVERAGE SALES.
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RELEVANT FACTORS PROMOTIONAL FOOD -DISCONTINUED AFTER
MONTH 12
PIANO PLAYER-DISCONTINUED AFTER MONTH 13
DATA MONTHS 14 AND 15 UNAVAILABLE CHANGE IN RECORD-KEEPING DUE TO CHANGE IN OWNERSHIP
CAN NOT USE BEVTOTAL AND BEVPUB OR BEVNITE, AND SIMILARLY FOODTOTAL AND FOODPUB OR FOODNITE TO PREDICT TOTAL SALES
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HYPOTHESIS NULL: THE FACTORS OF ROOM, SEASON,
PROMOTIONAL FOOD AND PIANO ARE INSIGNIFICANT IN RELATION TO SALES.
ALT: THE FACTORS OF ROOM, SEASON, PROMOTIONAL FOOD AND PIANO ARE SIGNIFICANT IN RELATION TO SALES.
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DATA MONTH Month number (month 1 was a January)
BEVTOTAL Total beverage sales (in $) pub and nightclub
BEVPUB Beverage sales (in $) for the Pour Nous Lounge
BEVNITE Beverage sales (in $) for the Gaiete night club
FOODTOT Total food expenditures (in $) pub and nightclub
FOODPUB Amount spent on food (in $) for the Pour Nous Lounge
FOODNITE Amount spent on food (in $) for the Gaiete night club
ROOMS Total room occupancy for the Westar
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DATA ANALYSISGOAL IS TO FIND IF ANY RELATIONSHIPS EXIST
BETWEEN TOTAL SALES VS. ROOMS, SEASON, PROMOTIONAL FOOD, PIANO
MODEL TO PREDICT TOTAL SALES:
Final Equation: Y = -4895.8X + 31324 (X=0,1)
VALIDITY OF FINAL REGRESSION EQUATION:
Adjusted R Square: 22%
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DATA ANALYSIS
THE VARIABLE THAT IS SIGNIFICANT: PROMOTIONAL FOOD
HOW DOES TOTAL SALES CHANGE WITH EACH OF THE RELEVANT VARIABLES?
− OFFER THE PROMOTIONAL FOOD, THE TOTAL SALES WILL DECREASE
− DO NOT OFFER THE PROMOTIONAL FOOD, THE TOTAL SALES WILL INCREASE.
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DATA ANALYSIS FINAL
MULTIPLE REGRESSION ANALYSISIS THERE A RELATIONSHIP
BETWEEN PROMO FOOD & TOTAL SALES?
MULTIPLE R: 0.499
R SQUARED: 25%
ADJUSTED R SQUARED: 22%
STANDARD ERROR: 4396.37
SIGNIFICANCE: 68.25 E-5
P VALUE: 68.25 E-5
INTERCEPT: 31323.67
SLOPE: -4895.82
F VALUE: 8.64
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RECOMMENDATIONSRECOMMEND TO USE THIS MODEL
TO FORECAST TOTAL SALES SINCE IT IS BETTER THAN THE OLD MODEL
FINAL R2 =22% VS. OLD R2 =9%
CONTINUE TO COLLECT MORE DATA
DO NOT OFFER PROMOTIONAL FOOD SINCE IT DECREASES SALES
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RECOMMENDATIONS
WESTAR SHOULD REVITALIZE IT’S CURRENT MARKETING STRATEGIES TO INCREASE HOTEL OCCUPANCY WHICH WOULD THEN INCREASE TOTAL BEVERAGE SALES
THE MAXIMUM OCCUPANCY WAS 6,331 VS. CAPACITY 7,500*/MONTH FOR 1 OUT OF THE 28 MONTHS OF DATA
*250 ROOMS X 30 DAYS/MONTH=7,500
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