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MATH533: Applied Managerial Statistics Course project part A

I. Introduction. AJ DAVIS is a department store chain, which has many credit customers and wants to find out more information about these customers. A sample of 50 credit customers is selected with data collected on the following five variables: 1. Location (Rural, Urban, Suburban) 2. Income (in $1,000s) 3. Size (Household size) 4. Years (the number of years that the customer has lived in the current location) 5. Credit balance (the customers current credit balance on the stores credit card, in $) II. Individual variables. 1. Location
Tally for Discrete Variables: Location
Location Rural Suburban Urban N= Count 13 15 22 50 Percent 26.00 30.00 44.00

Pie Chart of Location


Category Rural Suburban Urban

Rural 13, 26.0%

Urban 22, 44.0%

Suburban 15, 30.0%

Interpretation: Look at the table and the pie chart above, we can see the location of AJ Davis customers is distributed in 3 areas: rural, urban and suburban. The majority of customer live in urban areas with 44%. Suburban areas with 30% of customers are the second and rural areas have the least amount of customers with 26%. 2. Income.
Descriptive Statistics: Income ($1000)
Total Count 50 Range 46.00

Variable Income ($1000) Variable Income ($1000)

Mean 43.74

StDev 14.64

Minimum 21.00

Q1 30.00

Median 43.00

Q3 55.00

Maximum 67.00

Histogram (with Normal Curve) of Income ($1000)


7 6 5 F requency 4 3 2 1 0
Mean 43.74 StDev 14.64 N 50

10

20

30

40 50 Income ($1000)

60

70

Interpretation: Based on the table and histogram, we have some comments as follow. The range of customers income is $46,000, with the highest income at $67,000 and the lowest at $21,000. The mean (average) income of a customer is $43,740. The median income is $43,000. Because the median is less than the mean, distribution is skewed to the right. This means the bigger portion of customers have an income under the rest of customers. However, this difference is not much.

3. Credit balance
Descriptive Statistics: Credit Balance($)
Total Count 50 Range 3814

Variable Credit Balance($) Variable Credit Balance($)

Mean 3970

StDev 932

Minimum 1864

Q1 3109

Median 4090

Q3 4748

Maximum 5678

Histogram (with Normal Curve) of Credit Balance($)


14 12 10 Frequency 8 6 4 2 0
Mean 3970 StDev 931.9 N 50

2000

3000

4000 Credit Balance($)

5000

6000

Interpretation: The range of customers credit balance is $3814, with the highest credit balance at $5678 and the lowest at $1864. The mean (average) credit balance of a customer is $3970. The median credit balance is $4090. We can see distribution is skewed to the left because the median is more than the mean. Look at the histogram, we can see that a bigger portion of cardholders carry an approximate $4000 balance. This means that a greater number of customers have a credit balance in this range.

III. Relationships 1. Location and Income


Descriptive Statistics: Income ($1000)
Variable Income ($1000) Location Rural Suburban Urban Total Count 13 15 22 Mean 33.69 50.67 44.95 StDev 7.79 15.26 14.56 Minimum 22.00 22.00 21.00 Q1 28.50 39.00 32.75 Median 31.00 54.00 48.00 Q3 39.50 63.00 55.00

Variable Income ($1000)

Location Rural Suburban Urban

Maximum 50.00 67.00 67.00

Range 28.00 45.00 46.00

Look at the above table we can see the difference in income regarding the location of customers. The means indicate the average income of each area the Rural, Suburban and Urban. We can also observe the difference in average income of the three areas and suburban area has the biggest average income with $50,670. In suburban and urban areas, customers have the highest income with $67,000. Therefore, AJ DAVIS should target customers in these areas. 2. Location and Size
Tabulated statistics: Location, Size
Rows: Location 1 Rural Suburban Urban All 5 0 0 5 2 7 2 6 15 Columns: Size 3 0 2 6 8 4 1 5 3 9 Count 5 0 2 3 5 6 0 3 2 5 7 0 1 2 3 All 13 15 22 50

Cell Contents:

Firstly, we can see that a majority of customers lives in urban area, the second is suburban area and then rural area. Almost households in rural area contain 1 or 2 people. For urban area, there are 54.54% of households containing 2 or 3 people, 27.27% of households containing 4 or 5 people and 18.18% of households containing 6 or 7 people. Besides, the rate for suburban area in order are 26.66%, 46.66% and 26.66%. 3. Credit balance and size.
Descriptive Statistics: Credit Balance($)
Variable Credit Balance($) Size 1 2 3 4 5 Mean 2781 3278 4063 4487 4533 SE Mean 122 180 119 234 301 StDev 272 699 336 702 673 Minimum 2477 1864 3623 3074 3586 Q1 2530 2921 3772 4037 3879 Median 2731 3159 4063 4764 4742 Q3 3058 3890 4213 5069 5083

6 7 Variable Credit Balance($) Size 1 2 3 4 5 6 7

5032 4911 Maximum 3121 4273 4705 5149 5345 5678 5301

318 206 Range 644 2409 1082 2075 1759 1551 698

712 356

4127 4603

4270 4603

5370 4828

5626 5301

From this table, we can see that the households containing 6 people have the highest credit balance of $5032, the second is household size of 7 and then is household size of 5. And the lowest credit balance is 2781 of the households containing 1 people. So perhaps, we can say that the greater the household is, the higher credit balance is. IV. Conclusion. Based on the statistics and the analysis above, we can understand more clearly about the customers of AJ DAVIS. We already know who customers are, where they are, how their family is about And from those, we can determine what we should do on the future to attract more customers. In short, statistics is useful for us in business because it allow us to analyze and determine the future tendency effectively.