MGMT601_2305A_03_ColeKaylie_IP3-2(2)

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Colorado Technical University *

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2304A

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Chemistry

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Jan 9, 2024

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docx

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4

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1 Unit 3 IP Kaylie Cole Unit 3 IP Colorado Technical University 3 December 2023
2 Unit 3 IP Introduction The management question at hand is whether to expand the Outdoor Sporting Goods company's market to Lincoln Park (60614) or maintain the existing market. The specific decision involves two product lines, PLA and PLB. In Unit 2, the recommendation was made based on general economic, educational, and household income information to expand. In order to formu- late hypotheses for chi-square testing, we must define our null and alternative hypotheses. Null Hypothesis (HO) For Product Line A (PLA): \(H_0: \text{PLAo} = \text{PLAe}\) For Product Line B (PLB): \(H_0: \text{PLBo} = \text{PLBe}\) The null hypothesis assumes that the observed product line sales in Lincoln Park are equal to the expected product line sales based on general U.S. demographics. Alternative Hypothesis (H1) For Product Line A (PLA): \(H_1: \text{PLAo} \neq \text{PLAe}\) For Product Line B (PLB): \(H_1: \text{PLBo} \neq \text{PLBe}\) The alternative hypothesis implies a significant difference between observed and ex- pected product line sales in Lincoln Park. Chi-Square Justification The chi-square test is chosen for this scenario due to its suitability for categorical data analysis, specifically the comparison of observed and expected frequencies. In this context, we use it to evaluate whether the distribution of product line sales in Lincoln Park differs signifi- cantly from what would be expected based on U.S. demographics. The assumptions are based on an alpha level of 0.05 and 5 degrees of freedom, considering the limitations of available data.
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