Bus 352 Benchmark Study
Recently, Ashland MultiComm Services has been criticized
for its inadequate customer service in responding to questions
and problems about its telephone, cable television, and
Internet services. Senior management has established a task
force charged with the business objective of improving customer
service. In response to this charge, the task force collected
data about the types of customer service errors, the
cost of customer service errors, and the cost of wrong billing
errors. It found the following data:
Types of Customer Service Errors
Type of Errors Frequency
Incorrect accessory 27
Incorrect address 42
Incorrect contact phone 31
Invalid wiring 9
On-demand programming error 14
Subscription not ordered 8
Suspension error 15
Termination error 22
Website access error 30
Wrong billing 137
Wrong end date 17
Wrong number of connections 19
Wrong price quoted 20
Wrong start date 24
Wrong subscription type 33
Total 448
Cost of Customer Service Errors in the Past Year
Type of Errors Cost ($ thousands)
Incorrect accessory 17.3
Incorrect address 62.4
Incorrect contact phone 21.3
Invalid wiring 40.8
On-demand programming errors 38.8
Subscription not ordered 20.3
Suspension error 46.8
Termination error 50.9
Website access errors 60.7
Wrong billing 121.7
Wrong end date 40.9
Wrong number of connections 28.1
Wrong price quoted 50.3
Wrong start date 40.8
Wrong subscription type 60.1
Total 701.2
Type and Cost of Wrong Billing Errors
Type of Wrong Billing Errors Cost ($ thousands)
Declined or held transactions 7.6
Incorrect account number 104.3
Invalid verification 9.8
Total 121.7
i. What conclusions can you reach concerning the original call to
action button and the new call to action button and the original
web design and the new web design?
j. Compare your conclusions in (i) with those in (c) and (g).
2.107 (Class Project) Have each student in the class respond to
the question “Which carbonated soft drink do you most prefer?”
so that the instructor can tally the results into a summary table.
a. Convert the data to percentages and construct a Pareto chart.
b. Analyze the findings.
2.108 (Class Project) Cross-classify each student in the class by
gender (male, female) and current employment status (yes, no), so
that the instructor can tally the results.
a. Construct a table with either row or column percentages, depending
on which you think is more informative.
b. What would you conclude from this study?
c. What other variables would you want to know regarding employment
in order to enhance your findings?
Report Writing Exercises
2.109 Referring to the results from Problem 2.100 on page 76
concerning the weights of Boston and Vermont shingles, write a
report that evaluates whether the weights of the pallets of the two
types of shingles are what the company expects. Be sure to incorporate
tables and charts into the report.
1. Review these data (stored in AMS2-1 ). Identify the variables
that are important in describing the customer service
problems. For each variable you identify, construct
the graphical representation you think is most appropriate
and explain your choice. Also, suggest what other information
concerning the different types of errors would
be useful to examine. Offer possible courses of action for
either the task force or management to take that would
support the goal of improving customer service.
2. As a follow-up activity, the task force decides to collect
data to study the pattern of calls to the help desk (stored
in AMS2-2 ). Analyze these data and present your conclusions
in a report.
Business Statistics: A First Course, Seventh Edition, by David M. Levine, Kathryn A. Szabat, and David F. Stephan. Published by Pearson.
Cases for Chapter 3
Managing Ashland MultiComm Services
For what variable in the Chapter 2 “Managing Ashland
MultiComm Services” case (see page 78) are numerical
descriptive measures needed?
1. For the variable you identify, compute the appropriate
numerical descriptive measures and construct a boxplot.
2. For the variable you identify, construct a graphical display.
What conclusions can you reach from this other plot
that cannot be made from the boxplot?
3. Summarize your findings in a report that can be included
with the task force’s study.
Digital CaseCases for Chapter 3
Managing Ashland MultiComm Services
For what variable in the Chapter 2 “Managing Ashland
MultiComm Services” case (see page 78) are numerical
descriptive measures needed?
1. For the variable you identify, compute the appropriate
numerical descriptive measures and construct a boxplot.
2. For the variable you identify, construct a graphical display.
What conclusions can you reach from this other plot
that cannot be made from the boxplot?
3. Summarize your findings in a report that can be included
with the task force’s study.
Digital CaseCases for Chapter 3
Managing Ashland MultiComm Services
For what variable in the Chapter 2 “Managing Ashland
MultiComm Services” case (see page 78) are numerical
descriptive measures needed?
1. For the variable you identify, compute the appropriate
numerical descriptive measures and construct a boxplot.
2. For the variable you identify, construct a graphical display.
What conclusions can you reach from this other plot
that cannot be made from the boxplot?
3. Summarize your findings in a report that can be included
with the task force’s study.
Digital CaseCases for Chapter 3
Managing Ashland MultiComm Services
For what variable in the Chapter 2 “Managing Ashland
MultiComm Services” case (see page 78) are numerical
descriptive measures needed?
1. For the variable you identify, compute the appropriate
numerical descriptive measures and construct a boxplot.
2. For the variable you identify, construct a graphical display.
What conclusions can you reach from this other plot
that cannot be made from the boxplot?
3. Summarize your findings in a report that can be included
with the task force’s study.
Digital Case
Cases f o r C h a p t e r 5
Managing Ashland MultiComm Services
The Ashland MultiComm Services (AMS) marketing department
wants to increase subscriptions for its 3-For-All
telephone, cable, and Internet combined service. AMS marketing
has been conducting an aggressive direct-marketing
campaign that includes postal and electronic mailings and
telephone solicitations. Feedback from these efforts indicates
that including premium channels in this combined service is
a very important factor for both current and prospective subscribers.
After several brainstorming sessions, the marketing
department has decided to add premium cable channels as a
no-cost benefit of subscribing to the 3-For-All service.
The research director, Mona Fields, is planning to conduct
a survey among prospective customers to determine
how many premium channels need to be added to the 3-For-
All service in order to generate a subscription to the service.
Based on past campaigns and on industry-wide data, she estimates
the following:
Number of Free
Premium Channels
Probability of
Subscriptions
0 0.02
1 0.04
2 0.06
3 0.07
4 0.08
5 0.085
1. If a sample of 50 prospective customers is selected and no
free premium channels are included in the 3-For-All service
offer, given past results, what is the probability that
a. fewer than 3 customers will subscribe to the 3-For-All
service offer?
b. 0 customers or 1 customer will subscribe to the 3-For-
All service offer?
c. more than 4 customers will subscribe to the 3-For-All
service offer?
d. Suppose that in the actual survey of 50 prospective
customers, 4 customers subscribe to the 3-For-All service
offer. What does this tell you about the previous
estimate of the proportion of customers who would
subscribe to the 3-For-All service offer?
2. Instead of offering no premium free channels as in Problem
1, suppose that two free premium channels are included
in the 3-For-All service offer. Given past results,
what is the probability that
a. fewer than 3 customers will subscribe to the 3-For-All
service offer?
b. 0 customers or 1 customer will subscribe to the 3-For-
All service offer?
c. more than 4 customers will subscribe to the 3-For-All
service offer?
d. Compare the results of (a) through (c) to those of 1.
e. Suppose that in the actual survey of 50 prospective
customers, 6 customers subscribe to the 3-For-All service
offer. What does this tell you about the previous
Cases for Chapter 5 195
Business Statistics: A First Course, Seventh Edition, by David M. Levine, Kathryn A. Szabat, and David F. Stephan. Published by Pearson.
Copyright © 2016 by Pearson Education, Inc.
ISBN: 978-1-323-26258-0
196 Chapter 5 Discrete Probability Distributions
estimate of the proportion of customers who would
subscribe to the 3-For-All service offer?
f. What do the results in (e) tell you about the effect of
offering free premium channels on the likelihood of
obtaining subscriptions to the 3-For-All service?
3. Suppose that additional surveys of 50 prospective customers
were conducted in which the number of free
premium channels was varied. The results were as
follows:
Number of Free
Premium Channels
Number of
Subscriptions
1 5
3 6
4 6
5 7
How many free premium channels should the research director
recommend for inclusion in the 3-For-All service? Explain.
Digital CaseCases f o r C h a p t e r 5
Managing Ashland MultiComm Services
The Ashland MultiComm Services (AMS) marketing department
wants to increase subscriptions for its 3-For-All
telephone, cable, and Internet combined service. AMS marketing
has been conducting an aggressive direct-marketing
campaign that includes postal and electronic mailings and
telephone solicitations. Feedback from these efforts indicates
that including premium channels in this combined service is
a very important factor for both current and prospective subscribers.
After several brainstorming sessions, the marketing
department has decided to add premium cable channels as a
no-cost benefit of subscribing to the 3-For-All service.
The research director, Mona Fields, is planning to conduct
a survey among prospective customers to determine
how many premium channels need to be added to the 3-For-
All service in order to generate a subscription to the service.
Based on past campaigns and on industry-wide data, she estimates
the following:
Number of Free
Premium Channels
Probability of
Subscriptions
0 0.02
1 0.04
2 0.06
3 0.07
4 0.08
5 0.085
1. If a sample of 50 prospective customers is selected and no
free premium channels are included in the 3-For-All service
offer, given past results, what is the probability that
a. fewer than 3 customers will subscribe to the 3-For-All
service offer?
b. 0 customers or 1 customer will subscribe to the 3-For-
All service offer?
c. more than 4 customers will subscribe to the 3-For-All
service offer?
d. Suppose that in the actual survey of 50 prospective
customers, 4 customers subscribe to the 3-For-All service
offer. What does this tell you about the previous
estimate of the proportion of customers who would
subscribe to the 3-For-All service offer?
2. Instead of offering no premium free channels as in Problem
1, suppose that two free premium channels are included
in the 3-For-All service offer. Given past results,
what is the probability that
a. fewer than 3 customers will subscribe to the 3-For-All
service offer?
b. 0 customers or 1 customer will subscribe to the 3-For-
All service offer?
c. more than 4 customers will subscribe to the 3-For-All
service offer?
d. Compare the results of (a) through (c) to those of 1.
e. Suppose that in the actual survey of 50 prospective
customers, 6 customers subscribe to the 3-For-All service
offer. What does this tell you about the previous
Cases for Chapter 5 195
Business Statistics: A First Course, Seventh Edition, by David M. Levine, Kathryn A. Szabat, and David F. Stephan. Published by Pearson.
Copyright © 2016 by Pearson Education, Inc.
ISBN: 978-1-323-26258-0
196 Chapter 5 Discrete Probability Distributions
estimate of the proportion of customers who would
subscribe to the 3-For-All service offer?
f. What do the results in (e) tell you about the effect of
offering free premium channels on the likelihood of
obtaining subscriptions to the 3-For-All service?
3. Suppose that additional surveys of 50 prospective customers
were conducted in which the number of free
premium channels was varied. The results were as
follows:
Number of Free
Premium Channels
Number of
Subscriptions
1 5
3 6
4 6
5 7
How many free premium channels should the research director
recommend for inclusion in the 3-For-All service? Explain.
Digital CaseCases f o r C h a p t e r 5
Managing Ashland MultiComm Services
The Ashland MultiComm Services (AMS) marketing department
wants to increase subscriptions for its 3-For-All
telephone, cable, and Internet combined service. AMS marketing
has been conducting an aggressive direct-marketing
campaign that includes postal and electronic mailings and
telephone solicitations. Feedback from these efforts indicates
that including premium channels in this combined service is
a very important factor for both current and prospective subscribers.
After several brainstorming sessions, the marketing
department has decided to add premium cable channels as a
no-cost benefit of subscribing to the 3-For-All service.
The research director, Mona Fields, is planning to conduct
a survey among prospective customers to determine
how many premium channels need to be added to the 3-For-
All service in order to generate a subscription to the service.
Based on past campaigns and on industry-wide data, she estimates
the following:
Number of Free
Premium Channels
Probability of
Subscriptions
0 0.02
1 0.04
2 0.06
3 0.07
4 0.08
5 0.085
1. If a sample of 50 prospective customers is selected and no
free premium channels are included in the 3-For-All service
offer, given past results, what is the probability that
a. fewer than 3 customers will subscribe to the 3-For-All
service offer?
b. 0 customers or 1 customer will subscribe to the 3-For-
All service offer?
c. more than 4 customers will subscribe to the 3-For-All
service offer?
d. Suppose that in the actual survey of 50 prospective
customers, 4 customers subscribe to the 3-For-All service
offer. What does this tell you about the previous
estimate of the proportion of customers who would
subscribe to the 3-For-All service offer?
2. Instead of offering no premium free channels as in Problem
1, suppose that two free premium channels are included
in the 3-For-All service offer. Given past results,
what is the probability that
a. fewer than 3 customers will subscribe to the 3-For-All
service offer?
b. 0 customers or 1 customer will subscribe to the 3-For-
All service offer?
c. more than 4 customers will subscribe to the 3-For-All
service offer?
d. Compare the results of (a) through (c) to those of 1.
e. Suppose that in the actual survey of 50 prospective
customers, 6 customers subscribe to the 3-For-All service
offer. What does this tell you about the previous
Cases for Chapter 5 195
Business Statistics: A First Course, Seventh Edition, by David M. Levine, Kathryn A. Szabat, and David F. Stephan. Published by Pearson.
Copyright © 2016 by Pearson Education, Inc.
ISBN: 978-1-323-26258-0
196 Chapter 5 Discrete Probability Distributions
estimate of the proportion of customers who would
subscribe to the 3-For-All service offer?
f. What do the results in (e) tell you about the effect of
offering free premium channels on the likelihood of
obtaining subscriptions to the 3-For-All service?
3. Suppose that additional surveys of 50 prospective customers
were conducted in which the number of free
premium channels was varied. The results were as
follows:
Number of Free
Premium Channels
Number of
Subscriptions
1 5
3 6
4 6
5 7
How many free premium channels should the research director
recommend for inclusion in the 3-For-All service? Explain.
Digital Case
Cases for Chap ter 9
Managing Ashland MultiComm Services
Continuing its monitoring of the upload speed first described
in the Chapter 6 Managing Ashland MultiComm
Services case on page 221, the technical operations department
wants to ensure that the mean target upload speed for
all Internet service subscribers is at least 0.97 on a standard
scale in which the target value is 1.0. Each day, upload
speed was measured 50 times, with the following results
(stored in AMS9 ).
0.854 1.023 1.005 1.030 1.219 0.977 1.044 0.778 1.122 1.114
1.091 1.086 1.141 0.931 0.723 0.934 1.060 1.047 0.800 0.889
1.012 0.695 0.869 0.734 1.131 0.993 0.762 0.814 1.108 0.805
1.223 1.024 0.884 0.799 0.870 0.898 0.621 0.818 1.113 1.286
1.052 0.678 1.162 0.808 1.012 0.859 0.951 1.112 1.003 0.972
1. Compute the sample statistics and determine whether
there is evidence that the population mean upload speed
is less than 0.97.
2. Write a memo to management that summarizes your conclusions.