Project analysis

Projectanalysis

Issue3

Theproject analysis team has also been mandated to analyse a proposalfrom the marketing department aimed at eliminating phone orderingsystem now operating at Diatribe Company. The marketing departmenthas analysed the performance of its new on-line shopping methodologyas compared to the existing techniques of retailers shopping at theCompany’s warehouse and phoning in their orders and consequentlyprovided the information provided in appendix 1.

Inworking out descriptive statistics in the excel spreadsheet using theanalysis data provided, the information provided in table 1 below wasobtained.

Table1.Descriptive statistics

INTERNET

&nbsp

PHONE

&nbsp

WAREHOUSE

&nbsp

&nbsp

&nbsp

&nbsp

&nbsp

&nbsp

&nbsp

Mean

12515.8

Mean

11538.23

Mean

12137.86

Standard Error

118.626

Standard Error

100.3188

Standard Error

105.4272

Median

12505

Median

11526

Median

12059

Mode

#N/A

Mode

#N/A

Mode

#N/A

Standard Deviation

786.8757

Standard Deviation

665.4396

Standard Deviation

699.325

Sample Variance

619173.3

Sample Variance

442809.8

Sample Variance

489055.5

Kurtosis

-0.42374

Kurtosis

0.336031

Kurtosis

1.456416

Skewness

-0.14536

Skewness

0.106273

Skewness

0.946477

Range

3291

Range

3143

Range

3279

Minimum

10689

Minimum

9958

Minimum

10816

Maximum

13980

Maximum

13101

Maximum

14095

Sum

550695

Sum

507682

Sum

534066

Count

44

Count

44

Count

44

Confidence Level (95.0%)

239.2321

Confidence Level (95.0%)

202.3121

Confidence Level (95.0%)

212.6142

Itis very clear that the mean sales achieved through selling thecompany’s products on-line were higher as compared to warehouse andphoning sales. Sales through phoning lagged behind others with amean of $11538.23 thousands. At 95% confidence level, the mean salesin both cases are within the normal population mean. However, thestandard deviation is higher in on-line sales as opposed to the othermethodologies.

Assumingthat the sales operations have a normal distribution, and assumingthat the mean for warehouse sales is also representing the populationmean µ, we can find out whether there is a significant differencebetween the sample mean for on-line sales and phoning sales relativeto the mean for warehouse sales by calculating there Z scores [ CITATION Owe81 l 1033 ].

TheZ score for on-line sales is (12515.8 – 12137.86)/ 786.88 = 0.4803.

TheZ score for phoning sales is (11538 – 12137.86)/ 665.44 = -0.90145.

TheZ scores show that phoning sales are within the normal limits of thepopulation mean but on the lower side of the mean hence giving anegative Z score. On the basis of these results, the company needsto improve phoning sales or avoid it altogether.

Lookingat the statistical values obtained by the analysis team, it is goodto conclude at 95% confidence level that the use of on-lineoperational techniques in selling the company’s products is betterthan using phone in placing orders and achieving related sales.

Otherthan the decisions based on statistics, tnvrstar in their article inhubpages have indicated that the freedom of choice is higher inon-line shopping than visiting a nearby shop or warehouse to make achoice [ CITATION tnv14 l 1033 ]. Tnvrstar has also mentioned that freedom of choice is higher on-linebecause if you do not like the price of an item, you can switch toother on-line services or you canfollow the same procedure in a normal shop or warehouse but it wouldtake more time and energy to do so.

Suchfactors would therefore favor the use on internet services as opposedto conventional operations and these would result in higher sales. Privacy is also crucial to many of us who may not wish to buy someitems in public. On-line services would offer a platform whereprivacy is guaranteed and you can buy any kind of product fromon-line web store anonymously to maintain your desired privacy asalso stated by tnvrstar [ CITATION tnv14 l 1033 ].

Thereforethe marketing department of the company is justified in recommendingimmediate elimination of phone ordering system from the operations ofDiatribe Company.

Furtherinvestigations by the team involved finding a correlation betweenwarehouse selling verses phone selling and also warehouse sellingversus on-line selling. Figures2 and 3 show the relationship thatwas obtained in these cases.

Figure2: warehouse verses on-line sales

Figure3: warehouse verses phoning sales.

Aquick assessment of the two graphs shows that slope in figure 2 isgreater than the slope in figure 3.

SUMMARY OUTPUT

Regression Statistics

Multiple R

0.06545

R Square

0.004284

Adjusted R Square

-0.01942

Standard Error

671.8712

Observations

44

ANOVA

&nbsp

df

SS

MS

F

Regression

1

81565.03278

81565.03

0.180689118

Residual

42

18959256.69

451410.9

Total

43

19040821.73

&nbsp

&nbsp

&nbsp

Coefficients

Standard Error

t Stat

P-value

Intercept

10782.3

1781.222831

6.053312

3.32891E-07

X Variable 1

0.062279

0.146511832

0.425075

0.672951688

SUMMARY OUTPUT

Regression Statistics

Multiple R

0.16496716

R Square

0.027214164

Adjusted R Square

0.004052596

Standard Error

785.2796124

Observations

44

ANOVA

&nbsp

df

SS

MS

F

Regression

1

724562.2307

724562.2307

1.174971

Residual

42

25899890.93

616664.0697

Total

43

26624453.16

&nbsp

&nbsp

&nbsp

Coefficients

Standard Error

t Stat

P-value

Intercept

10262.7664

2081.884191

4.929556816

1.34E-05

X Variable 1

0.185619901

0.171242285

1.083960667

0.284566

Foron-line sales, the regression line is y = 0.1856x + 10262.77 asopposed to phoning sales regression line equation which is y =0.0623x + 10782.3. The gradient in the first case is three times thegradient in the second case implying a better relationship andperformance by on-line sales. The R squares obtained indicate thatthe relationship between on-line sales and warehouse sales is higherhence giving more reason as to why dropping phoning sales ispreferable. Phoning sales are also challenging and as MaRS haveindicated in their article on sales basics, staying positive, beingpersistent and listening and adjusting to customers responses are thepersonal ingredients for success [ CITATION MaR09 l 1033 ]. However, these could be the more reasons why phoning sales are notfavored.

References

MaRS. (2009, december 6). MaRS sales basics. Retrieved October 3, 2014, from MaRS website: http://www.marsdd.com/sales-basics

Owen, F., &amp Jonnes, R. (1981). Statistics. London: Butler and Tanner Ltd.

tnvrstar. (n.d.). hubpages. Retrieved october 3, 2014, from hubpages website: http://www.tnvrstar.hubpages.com/hub/on-lineshoppingtips

Appendix1

Internet

Phone

Warehouse

13361

9958

11692

12302

12123

10816

10874

11498

13224

11856

11051

12099

11239

11459

11900

12224

11030

14095

12753

11856

11517

12683

12308

12062

12466

11496

12263

13980

13006

13558

12503

11896

12210

12134

11726

11907

10689

11858

12488

11907

11621

12481

13576

11808

12234

12143

11554

11655

12507

12654

11450

13574

12079

11987

11696

11102

12383

13036

11277

12734

11887

10989

12200

12526

11332

12075

11582

10450

11993

11988

10392

12289

12004

11080

11779

12175

10488

11842

13674

11926

12698

13221

11371

12775

13297

11917

13044

13546

11490

12550

11920

11167

11690

12288

11087

11572

13827

13101

11778

13083

10594

12413

13248

12090

14052

12724

11132

11374

11951

11582

11684

13550

11563

11713

13001

11096

12056

11520

11075

11053

12888

12214

12211

12711

11751

11020

11935

11867

11827

12646

12568

11623

Allvalues in $ thousands.