case 4

Case 4 (Operations Management Application):

This case study involves Alumni in the Case 4 folder. The file contains

important source of revenue for colleges and universities. If administrators

could determine the factors that influence increases in the percentage of

alumni who make a donation (alumni giving rate), they might be able to

implement policies that could lead to increased revenue. Research shows

that students who are more satisfied with their contact with teachers are

more likely to graduate. As a result, one might suspect that smaller class

sizes and lower student-faculty ratios might lead to a higher percentage of

satisfied graduates, which in turn might lead to increases in the percentage of

alumni who make a donation.

The managerial report should contain such as:

1. Run the simple linear regression analysis to develop an estimated equation that could be used to predict the alumni-giving rate by

choosing graduation rate, % of classes under 20 students, or

student/faculty ratio as the independent variable. Indicate the one with

the highest R2. (20%)

2. Use the multiple linear regression analysis to develop an estimated regression equation that could be used to predict the alumni-giving

rate given the graduation rate, % of classes under 20 students, and the

student-faculty ratio. Is it a better fit compared with your answer in

(1)? Any multicollinearity exists? Please show the correlation

coefficients to comment. (20%)

3. What conclusion and recommendation can you derive from F and t tests in (2)? (20%)

4. With the multiple linear regression equation in (2), what will be the alumni-giving rate with the graduation rate as 80%, 50% of classes

with fewer than 20 students, and student-faculty ratio as 15? (20%)

5. Any possible modification you suggest for a better-fit multiple linear regression model? Adding or dropping independent variable(s)?

Change to any nonlinear model? Explain your suggestion. (20%)