Suppose A Sporting Goods Store Sold Treadmills And Ex 376129

Suppose A Sporting Goods Store Sold Treadmills Exercise Bikes And Eq

Suppose a sporting goods store sold treadmills, exercise bikes, and equipment service contracts over the past six months as shown in the table below. Equipment and Service Contract Sales Treadmill Exercise Bike Equipment Sales Service Contract Sales The store can only sell a service contract on a new piece of equipment. Of the 185 treadmills sold, 67 included a service contract and 118 did not. Respond to the following in a Word document and submit: 1. Construct a 95 percent confidence interval for the difference between the proportions of service contracts sold on treadmills versus exercise bikes. 2. Determine if there is or is not a major difference between the two pieces of equipment and provide a rationale for your response.

Paper For Above instruction

Introduction

The analysis of consumer preferences and sales behaviors for sporting equipment provides valuable insights for retailers to optimize their marketing and sales strategies. In particular, understanding the difference in the proportion of service contracts sold with new equipment such as treadmills and exercise bikes can influence promotional approaches and customer engagement. This paper aims to construct a 95% confidence interval for the difference in proportions of service contracts sold on treadmills versus exercise bikes and assess whether this difference is statistically significant or indicative of a meaningful variation.

Data Overview and Context

Over the past six months, a sporting goods store sold a total of 185 treadmills, with 67 including a service contract and 118 sold without. Although data on exercise bike sales are not explicitly detailed in the primary data provided, the focus remains on comparing the proportion of service contracts associated with treadmills against those with exercise bikes. The store's policy restricts the sale of service contracts solely to new equipment, which impacts the sales dynamics and customer options. To analyze these sales, statistical inference through confidence interval estimation is employed to determine whether the observed difference in service contract proportions between the two equipment types is statistically significant.

Constructing the Confidence Interval

The first step in the analysis involves calculating the proportions of service contracts for treadmills and exercise bikes. For treadmills, the proportion (p1̂) is computed as:

p1̂ = 67 / 185 ≈ 0.3622

The exercise bikes' data are not explicitly given, but assuming the total sales and contractual sellings are comparable, we’ll denote the proportion of service contracts sold on exercise bikes as p2̂, based on available data or assumptions if not specified.

The formula for the 95% confidence interval for the difference between two proportions (p1 – p2) is:

(p1̂ – p2̂) ± Z*(√[(p1̂(1–p1̂)/n1) + (p2̂(1–p2̂)/n2)])

Where:

- Z* = 1.96 (for 95% confidence)

- n1 = 185 (number of treadmills sold)

- n2 = total exercise bikes sold (not provided explicitly, so an assumption or estimation is necessary)

Assuming the sales of exercise bikes and their associated service contracts are known or estimated, the calculation proceeds by substituting the values into the formula, providing an interval estimate of the difference in proportions. This interval indicates the range within which the true difference likely falls with 95% confidence.

Analysis of the Difference and Significance

Once the confidence interval is established, the critical step involves analyzing whether the interval includes zero. If zero is within the interval, it suggests there is no statistically significant difference between the proportions of service contracts sold for treadmills and exercise bikes. Conversely, if zero is outside the interval, it indicates a significant difference.

Given the data for treadmills (67 sold with service contracts and total 185), the proportion is approximately 36.2%. If similar data exist for exercise bikes, say 40% of bikes sold included service contracts, the estimated difference (p1 – p2) could be tested for significance. If the confidence interval around this difference does not include zero, then a major difference exists.

Such a finding would imply that customers are more or less inclined to purchase service contracts depending on the type of equipment, which could influence sales strategies and promotional focus.

Conclusion

Constructing a 95% confidence interval for the difference between the proportions of service contracts sold on treadmills versus exercise bikes offers decisive statistical insights. If the interval includes zero, it indicates no major significant difference in customer behavior or preference between the two types of equipment. If not, the store might consider tailoring its sales approach differently for each equipment type. Ultimately, the statistical analysis informs decision-making on marketing, customer outreach, and service offerings to maximize revenue and customer satisfaction.

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