2 Many companies find that the implementation of total quali

2. Many companies find that the implementation of total quality management eventually results in improved sales. Companies that fail to adopt quality efforts lose market share in many cases or go out of business. One measure of the effect of a company\'s quality improvement efforts is customer satisfaction. Suppose Delta Wire hired a research firm to measure customer satisfaction each year. The research firm developed a customer satisfaction scale in which totally satisfied customers can award a score as high as 50 and totally unsatisfied customers can award scores as low as 0. The scores are measured across many different industrial customers and averaged for a yearly mean customer score. Do sales increase with increases in customer satisfaction scores? To study this notion, suppose the average customer satisfaction score each year for Delta Wire is paired with the company\'s total sales of that year for the last 15 years, and a regression analysis is run on the data. Assume the following Minitab and Excel outputs are the result. Suppose you were asked by Delta Wire to analyze the data and summarize the results. What would you find?

MINITAB OUTPUT
Regression Analysis: Sales Versus Satisfaction
The Regression equation is
Sales =1.73 + 0.162 CustSat
Predictor Coef StDev T p
Constant 1.7332 0.4364 3.97 0.002
CustSat 0.16245 0.01490 10.90 0.000
S= 0.4113 R-Sq= 90.1% R-Sq(adj)= 89.4%

Analysis of Variance
Source DF SS MS F p
Regression 1 20.098 20.098 118.80 0.000
Residual Error 13 2.199 0.169
Total 14 22.297

EXCEL OUTPUT
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.949
R Square 0.901
Adjusted R Square 0.894
Standard Error 0.411
Observations 15
ANOVA
Df SS MS F Significance F
Regression 1 20.098 20.098 118.8 0.000
Residual 13 2.199 0.169
Total 14 22. 297

Coefficients Standard Error t Stat P-value
Intercept 1.733 0.436 3.97 0.0016
Sick Days 0.162 0.015 10.90 0.0000

Solution

1) Regressin equation has 0.162 slope which is very less

This implies that there are other influential factors to increase sales than customer satisfaction , may be price or duration or warranty, etc.

2) Sales vs satisfaction T value shows 3.97 and p value =0.002

p value is very low. Hence there is difference between the groups.

3) F value is 118.00 and p = 0.00

This again shows that there is a considerable difference between the pairs.