The worksheet Purchasing Survey in the Performance Lawn Care database provides data related to predicting the level of business (Usage Level) obtained from a third-party survey of purchasing managers of customers Performance Lawn Care.8
The seven PLE attributes rated by each respondent are
8 The data and description of this case are based on the HATCO example on pages 28–29 in Joseph F. Hair, Jr., Rolph E. Anderson, Ronald L. Tatham, and William C. Black, Multivariate Analysis, 5th ed. (Upper Saddle River, NJ: Prentice Hall, 1998).
Responses to these seven variables were obtained using a graphic rating scale, where a 10-centimeter line was drawn between endpoints labeled “poor” and “excellent.” Respondents indicated their perceptions using a mark on the line, which was measured from the left endpoint. The result was a scale from 0 to 10 rounded to one decimal place.
Two measures were obtained that reflected the outcomes of the respondent’s purchase relationships with PLE:
The data also include four characteristics of the responding firms:
Can cause-and-effect models provide insight about the drivers of satisfaction and usage level? Summarize your results in a report to Ms. Burke.
The Performance Lawn Equipment database contains data needed to develop a pro forma income statement. Dealers selling PLE products all receive 18% of sales revenue for their part of doing business, and this is accounted for as the selling expense. The tax rate is 50%.
The CFO of Performance Lawn Equipment, J. Kenneth Valentine, would like to have a model to predict the net income for the next 3 years. To do this, you need to determine how the variables in the pro forma income statement will likely change in the future.
Use these rates to modify the pro Forma income statement to predict the net income over the next 3 years.
Construct a tornado chart to show how the assumptions impact the net income in your model.
Summarize your results and conclusions in a report to Mr. Valentine.
One of PLE’s manufacturing facilities produces metal engine housings from sheet metal for both mowers and tractors. Production of each product consists of five steps: stamping, drilling, assembly, painting, and packaging to ship to its final assembly plant.
The production rates in hours per unit and the number of production hours available in each department are given in the following table:
Production Hours Available
In addition, mower housings require 1.2 square feet of sheet metal per unit and tractor housings require 1.8 square feet per unit, and 2,500 square feet of sheet metal is available.
The company would like to maximize the total number of housings they can produce during the planning period.
Illustrate the results visually to help explain them in a presentation to Ms. Burke. In addition, conduct whatever what-if analyses (e.g., run different scenarios and apply parameter analysis) you feel are appropriate to include in your presentation.
Summarize your results in a well-written report.
An important aspect of business analytics is good communication. Summarize your findings and write up your answers to this case formally in a well-written report as if you were a consultant to Ms. Burke.
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