Quantitative Methods for Accounting and Finance Assignment Reports

Task summary:

You are required to complete a coursework assignment for the module Quantitative Methods in Accounting and Finance. This assignment contributes 100% of your final grade for the module. The assessment consists of three reports (case study style), each requiring statistical and quantitative analysis, interpretation, and presentation of findings

Assignment instructions:

Report 1: Retail Customer Survey

A large retail company conducted a customer survey. The survey investigated three areas of customer satisfaction: experience waiting for service at the desk, experience being served at the desk, and experience of self-service facilities at the store. Within each of these categories, respondents were asked to give ratings on several aspects of the company’s service. These ratings were then summed to give an overall satisfaction rating in each of the three areas of service. The summed ratings were scaled to lie between 0 and 100, with 0 representing extreme dissatisfaction and 100 representing extreme satisfaction. The accompanying data file ‘Retail Customer Survey’ contains the 0–100 ratings for the three areas of service, together with particulars of respondents’ gender and whether (or not) they would recommend the company to other people (a simple Yes/No response was required to this question).

Prepare a report comprising the following:

a. Use descriptive statistics (mean, median, standard deviation, min and max) to summarize each of the five variables in the data file (the three service ratings, customer gender and customer recommendation). Comment briefly on your findings. [12 marks]

b. Calculate confidence interval estimates of the mean service rating for the population of customers of the store, for each of the three service areas. Give an interpretation of each interval estimate. [10 marks]

c. Calculate confidence interval estimates of the proportion of the store’s customers who would recommend the company, and of the proportion of the store’s customers who are female. Give an interpretation of each interval estimate. [7 marks]

d. Suppose the store manager required an estimate of the percentage of store customers who would recommend the company within a margin of error of 3 percentage points. Using a 90% confidence level, how large should the sample size be? [6 marks]

(875 words)
(35 marks)

Report 2: Sales forecasting for new energy drink

A large beverage company is considering the launch of a new energy drink, currently code-named ‘PulseX’, in time for Christmas 2025. The question the company faces is deciding how many units to order from its manufacturers to meet anticipated sales demand. If too few are ordered, sales will be lost (a ‘stock-out’). If too many are ordered, losses will be incurred because of low prices realised in post-Christmas clearance sales.

The company’s sales analyst predicts an expected demand of 25,000 units with a 0.95 probability that demand will be between 15,000 units and 35,000 units. The four members of the management team have suggested order quantities for PulseX of 20,000; 24,000; 27,000; and 32,000 units. The manufacturing and distribution cost is £20 per unit. The company expects to sell PulseX before Christmas for £30 per unit. After the Christmas period, the company will sell surplus inventory for £10 per unit.

Prepare a report that addresses the following:

a. Using the sales analyst’s predictions, calculate the mean and standard deviation of a normal distribution that will approximate the probability distribution for demand. [5 marks]

b. Calculate the probability of a stock-out for the order quantity suggested by each member of the management team. [5 marks]

c. Calculate the projected profit for the order quantities suggested by the members of the management team under three scenarios: worst case, sales = 15,000 units; most likely case, sales = 25,000 units; best case, sales = 35,000 units. [10 marks]

d. Suppose the payment to the manufacturer is made at the end of July 2025. Assume half the Christmas sales revenue is received at the end of November, half at the end of December, and the after-Christmas sales revenue is received at the end of January 2026. Assume 32,000 units are ordered, and Christmas sales match the sales analyst’s expected demand figure. What is the projected profit at July 2025 prices if a discount rate of 0.25% per month is applied to the revenues? [10 marks]

(750 words)
(30 marks)
(LOs: 1, 2, 3)

Report 3: Action camera prices

A consumer affairs organisation (CAO) tested different point-and-shoot action cameras. Based upon factors such as the number of megapixels, weight (grams), image quality, and ease of use, the CAO constructed an overall score for each camera tested. The overall score ranges from 0 to 100, with higher scores indicating better overall test results.

Selecting a camera with many options can be a difficult process, and price is a key issue for most consumers. But by spending more, will a consumer really get a superior camera?

The accompanying Excel file ‘Action Cameras’ shows the brand, recommended retail price (£), number of megapixels, weight (grams), and the overall score for 13 GoPro and 15 DJI subcompact cameras that were tested by the CAO.

Prepare a report that covers the following areas:

a. Using overall score as the dependent (response) variable, construct three scatter diagrams, one using price as the independent (explanatory) variable, one using the number of megapixels as the independent (explanatory) variable, and one using camera weight as the independent (explanatory) variable. [6 marks]

b. Based on your plots from (a), comment briefly on the apparent relationship between overall score and each of the independent variables. Which of the three independent variables appears to be the best predictor of overall score (justify your answer)? [8 marks]

c. Calculate an estimated simple linear regression equation that could be used to predict the overall score given the price of the camera, and 95% confidence intervals for the slope and intercept parameters of the equation. Interpret the slope coefficient of your estimated equation and its associated confidence interval. [10 marks]

d. Calculate and interpret the R-squared value of the estimated equation in (c).[3 marks]

e. Suppose you examine only the data for the GoPro cameras. Based on these data, discuss the appropriateness of using a simple linear regression of overall score on price to estimate overall score. [8 marks]

(875 words)
(35marks)
(LOs: 1, 2, 3, 4)

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