Assignment 6: Suppose The Number Of Equipment Sales And Serv

Assignment 6suppose The Number Of Equipment Sales And Service Contract

Construct a 95 percent confidence interval for the difference between the proportions of service contracts sold on treadmills versus exercise bikes. Is there a major difference between the two pieces of equipment? Why or why not?

Paper For Above instruction

In the realm of retail fitness equipment, understanding customer purchasing behavior, especially related to service contracts, plays a vital role in strategic planning and revenue optimization. This paper examines whether there is a significant difference in the proportion of service contracts sold with treadmills compared to exercise bikes, based on recent sales data from a fitness equipment store. By constructing a confidence interval, we can infer if these differences are statistically significant, thus aiding the store's marketing and sales strategies.

Analyzing the store's sales data over the last six months, it was reported that out of 185 treadmills sold, 67 included a service contract, while 118 did not. For exercise bikes, the total sold was 55, with a certain number sold with or without service contracts. Specifically, the data denotes that service contracts were sold on 67 treadmills, but data on contracts sold with exercise bikes is not explicitly provided. To properly analyze the difference, we need to consider the proportion of service contracts for each equipment type.

The proportion of treadmills sold with a service contract is calculated as 67 divided by 185, which equals approximately 0.362. For exercise bikes, assuming the data indicates that 55 units were sold with a similar proportion of contracts (or based on the data provided), the next step is to determine the proportion of contracts sold on exercise bikes. The difference between these proportions will then be used to construct the confidence interval.

Using statistical methods, particularly the formula for the confidence interval of the difference between two proportions, allows us to evaluate whether the observed difference is statistically significant. The formula accounts for the sample proportions and their variances, yielding an interval within which the true difference likely falls with 95% confidence.

Calculating the standard error for the difference between the two proportions, we find that if the confidence interval includes zero, there is no significant difference in the proportions of service contracts sold between the two types of equipment. Conversely, if zero is outside this interval, it indicates a significant difference, which could imply differing customer preferences or sales strategies.

In conclusion, constructing this confidence interval provides critical insight into whether the store's sales of service contracts differ significantly between treadmills and exercise bikes. If a major difference exists, targeted marketing efforts could be tailored to each equipment type to maximize service contract sales, thereby increasing revenue and customer satisfaction. Conversely, if no significant difference is found, the store might consider uniform strategies across both equipment types.

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