Sales Amount and Shipping Costs System †MyAssignmenthelp.com

Question: Discuss about the Sales Amount and Shipping Costs System. Answer: Introduction The dataset on the office supply sales of the company Hardware and Garden Supplies consists of information about 2002 orders on nine of the variables Order ID, Order Priority, Order Quantity, Sales amount, Shipment mode, Shipping Cost, Region, Consumer segment and Days to ship. From the 2002 orders, 60 samples were selected randomly. Descriptive statistics such as frequency distribution tables of nominal and ordinal variables and for interval variables, necessary summary statistics will be mentioned along with suitable graphs. The range within which the average sales amount and shipping costs will lie will also be provided. Test will also be made to evaluate whether the shipping cost is higher in orders with critical priority. The difference between the average sales of the orders in eastern and western states has also to be tested. The test will be done using independent sample t-test. In the end, the relationship between the order quantity and sales amount has to be evaluated usin g regression analysis. The dataset contains 2002 orders. It will be extremely laborious to run analysis on all the 2002 orders. Thus, 60 orders have been selected from the 2002 orders to make the analysis easier. These orders have been selected randomly using uniform random number generation in MS EXCEL. All the analysis will be done on these selected 60 samples. The samples were selected randomly as the estimates obtained with this method of selection will represent the population most appropriately. Descriptive Statistics Now, analysis of the descriptive measures of the variables will be conducted. The first variable to be considered is Order Priority. The importance of the orders is denoted by this variable. The priority of critical is denoted by 4, high is denoted by 3, medium is denoted by 2, low is denoted by 1 and 0 denotes not specified. The responses will be summarized in the form of a table given in table 2.1. Row Labels Count of Order Priority Percentage of Order Priority 0 8 13% 1 10 17% 2 11 18% 3 17 28% 4 14 23% Grand Total 60 100% It can be seen clearly that most of the orders are of high priority (28 percent) and critical priority (23 percent). Only 14 percent of the respondents did not specify the priority of their orders. The second variable that will be considered is the order quantity. The number of items that have been ordered under the order ID is given by this variable. It has been found out that the average number of orders done per order ID is 28. Most of the order IDs have 17 orders. The standard deviation is found to be low (13.46) and thus, it can be said that the quantity of orders per order ID is mostly around 28. Orders per ID range between 1 and 49. It can also be said that 50 percent of the number of orders per ID lie between 17 and 38. The coefficient of variation (48 percent) being less than 100 percent indicates that the variance of the distribution is less. This means that most of the order IDs have orders close to 28, the mean value. The third variable that is to be considered is the total value of sales in $. The average sales value has been found to be $1352.11. The range of the sales values are very high and the coefficient of variation (216 percent) is a lot higher than 100 percent. Thus, it can be said that the variance of the distribution is extremely high and the sales values are a lot scattered from $1352.11, the average sales value. 50 percent of the sales values lies between $146.35 and $936.75. The fourth variable that is to be discussed is the shipment mode of the orders. The orders are shipped via three modes such as Regular air, Delivery truck and Express air coded as 1, 2 and 3 respectively. It can be seen clearly from figure 2.2 that most of the orders are shipped by Regular air. The fifth variable that will be considered is shipping cost. The average shipping cost has been found to be $9.41. The range of the shipping cost are very high and the coefficient of variation (138 percent) is a lot higher than 100. Thus, it can be said that the deviation of the values of the distribution from the average cost of shipping is extremely high and the sales values are a lot scattered from $9.41. Moreover, in 50 percent of the cases, the shipping cost lies between $2.2 and $9.04. The next variable that will be considered is the region to which the orders are delivered. The orders are delivered to only two regions the eastern region (E) and the western region (W). It can be seen clearly from figure 2.3 that 60 percent of the orders are delivered to the eastern regions and 40 percent of the orders are delivered to the western regions. The next variable that is to be considered is the consumer segment. This variable denotes the type of customers that who order the products. It can be seen clearly from figure 2.4 that 30 percent of the customers are corporate, 28 percent of the customers are consumers, 27 percent hold a small business and 15 percent run a home office. The last variable that is to be considered is the number of days that is required to ship the order. The average number of days required to ship the orders is 1.93 days. Most of the orders are shipped in 2 days. About 50 percent of the orders are shipped below 2 days. The range of the number of days to ship are low and the coefficient of variation (69 percent) is a less than 100. Thus, it can be said that the deviation of the values of the distribution from the average number of days to ship is low and the values are close to 1.93 days. Moreover, in 50 percent of the cases, the number of days to ship lies between 1 day and 2 days. We are 95 percent confident that the average sales cost for the home office customers lies between -$835.51 and $5299.20. The population mean for the average sales cost is found to be $1716.69. Thus, it can be seen that the population mean lies well within the limit given. We are also 95 percent confident that the average shipping cost for all sample orders lies between $6.13 and $12.70. The population mean for the shipping cost is found to be $9.41. Thus, it can be said that the population mean lies well within the interval. With the help of tests, it has been observed that the shipping cost of the orders with critical priority is less than the shipping cost of the orders with low priority. It has also been found from the test that the average sales order in dollars differs for the eastern and the western states. Relationship has to be established between the variables order quantity and the sales in dollars. It can be seen clearly that there is not much relation between the order quantity and sales amount from figure 2.6. The regression equation can be given by: In the above equation, y is the predicted value of the sales, x is the quantity of the products ordered. From the analysis, it can also be said that only 9 percent of the variations in the value of sales can be explained by this model. Conclusion From the analysis of the data supplied by Hardware and Garden Supplies, it has been seen that the average quantity of products ordered is approximately 28, the average value of sales is $1352.11, the average shipping cost is $9.41 and the average number of days required to ship the products is approximately 2 days. Also, it has been seen that 80 percent delivery is done by regular air, most of the orders are of high priority, the demand of the products is more in the eastern states. It can be said with 95 percent confidence that the population mean of the average sales amount of orders for the home office customers and shipping costs for all sample orders lie within the limits calculated. The shipping cost of orders with critical priority is less than that of low priority. The sales in eastern and western regions differ significantly. The sales can be estimated 8 percent accurately from the order quantity. The sample size collected for the 2002 data points is extremely low. Thus, it can be said that a sample of higher size will be able to predict the population more accurately.