College of Business and Public Affairs

Course Number: Management 320
Course Title: Advanced Statistics for Managers

Subject: Statistical Analysis
Course Number: Management 320
Course Title: Advanced Statistics for Managers
Credit Hours:  3
Contact Hours:  3 hours/week
Course Pre-requisites:  Math 210
Instructor:  Dr. John Knight
Office Location: Business Administration Bldg. 229A
e-Mail Address:
Office Hours:  TTh 2:15-5:15, 5:50 - 6:50 (Tuesday in Martin, Thursday in Jackson), TTh 9:25 - 10:25 P.M. (Tuesday in Martin, Thursday in Jackson)
Office Telephone: (731)587-7351
Course Text and Related Material:
Using Statistics to Analyze Business Problems:  Case Studies with Computer Databases by John E. Knight.  Additional References:  Any good library book on statistics will be a good reference or use the  link for a series of other on-line textbooks (see StatSoft link for an especially good text).
Other Pertinent Information:  Details of the course can be found on the web at
Disabled Students:  Any student eligible for and requestiong academic accommodations due to a disability is requested to provide a letter of accomodation from P.A.C.E. or Student Academic Support Center within the first two weeks of the semester.

Course Description:  Parametric statistics and basic tests of hypotheses, regression and correlation analysis, analysis of variance, and other topics in advanced statistics.  Emphasis on computer input and output.
General Course Objectives:
(1) To present the basic univariate and multivariate statistical methods utilized in business decision making in a case oriented teaching method.
(2) To develop the student's ability to analyze statistical data utilizing computer analysis.
(3) To develop a student's ability to perceive a statistical situation, collect data, analyze data, and reach conclusions that can be related to managers.
Expected Student Outcomes:
(1) Students will be able to interact with web-based material including downloading of programs and files.
(2) Students will learn a standardized statistical program for the analysis of statistical data.
(3) Students will learn how to determine if data is valid, how to search a data base for problems, how to analyze single variables in a data base, how to analyze relationships between two variables in a data base and how to analyze and interpret three or more variables and relationships in a data base.
Course Outline:  (Note:  An extremely detailed course outline is found at   A summary of the outline is attached by sequence.  The actual dates and topic presentations may vary slightly due to a multitude of factors.  Due to potential sickness or other University assignments,  the last sessions on the outline may not be covered.

Sessions Class Topics and Cases
Weeks #1-6  Analyzing Single Variables:  Summary Statistics, Confidence Intervals, Sampling Error, Hypothesis Testing and Simulations:  Presto Pizza Company
Weeks # 7-11 Anaylzing Two Variables at a Time:  Regression, Correlation, Analysis of Variance and Crosstabs:  Metro Realty Company
Weeks #12-15 Further Case Studies:
     Marketing Applications:  Cycle World
     Management Application of Wage Discrimination:  Service Pro
     Management Application of Employee Ratings:  Fabor Manufacturing Company
Final Exam


Grading Procedures:   Grades will be based on the percentage of total points (and attendance adjustments) that are possible during the course.
         A    87% and above
         B    76% to 87%
         C    65% to 76%
         D    55% to 65%
         F    below 55%

THERE WILL BE NO CURVING OF GRADES.  GRADES ARE NOT NEGOTIABLE!!! The curve has already been incorporated into the ranges above.  Absolutely, no additional grade adjustments will be made regardless of the situation.

The following approximate weights on materials and class participation can be anticipated:
   All tests, homework, and other assignments prior to final exam: 60%
   Final Exam Material (in total):  40%
         The final exam may take several forms - several in-class test periods and/or a final project and report.

Given the fact that the FINAL EXAM is COMPREHENSIVE and THOROUGH,  any student performing well on the final exam will have demonstrated great competence in the course.  Thus,  IF THE FINAL EXAM score is higher than the average of the tests during the semester,  then the FINAL EXAM WEIGHT will be 60% of the final grade.  IF THE FINAL EXAM score is LOWER than the average of the tests during the semester,  the FINAL EXAM WEIGHT will be 40% of the final grade.  Thus, every test and every grade will count in your final average,  but without a doubt,  your knowledge of the material
on the FINAL EXAM is the most important determinant of your final grade.

Class Policies:
Class Attendance Policy:  Class will be taken each day precisely at the scheduled starting time based on the computer time.  Each absence over 3 absences (two lates equal one absence)  will reduce your final grade by 1 point per absence while each additional late will reduce your final grade by 1/2 point.  If you are late, it will be the studentís responsibility to have the roll sheet reflect your absence at the end of the class at which you are late.  Once day of the class is passed, ABSOLUTELY NO CORRECTIONS WILL BE MADE.  Any student with perfect attendance (including no lates) will receive a bonus of 2 points on the final grade while any student having a maximum of one absence (or two lates) will receive one additional point on the final grade.

Testing and Other Procedures:  In order to insure student equity,  the University Office of Equity and Diversity has approved the following procedures regarding testing.  All tests will be passed out face down one at a time in sequential order.  Once all of the test papers are in front of the students and the instructor gives permission, the students may turn over the test. When the time for the test is over (based on the computer time), all remaining students will be required to immediately cease writing and stand behind their desk.  The students will remain standing until I personally collect each paper at which time they will be dismissed. Any student refusing to stand and stop writing at the designated ending time will receive a grade of zero.  Any student looking at the test before permission is given will receive a grade of zero.  Any student that keeps their hands on the test and not surrendering the test will be given a grade of zero.  The instructor has the right to call Safety and Security to collect the test from any student that will not surrender the test to the instructor when instructed to do so.  The test is considered University property and the studentís comments on the paper do not make the paper their property.  Thus, the instructor retains to right to collect each and every test that has been distributed to the students.   Although the test paper is considered University property, the tests will be destroyed 2 weeks after the beginning of the next semester (including summer) as per general practices established by University tradition.

In an additional effort to dispel any perceptions of discrimination, the instructor will not be give ANY ASSISTANCE OR ANSWER ANY QUESTIONS DURING THE TEST.  You must work the test completely on your own just as every other student.  Additionally,  on any test problem that has a specific numerical answer,  either the answer is correct or incorrect.  No part credit will be given.  If an error in a preceding portion of the problem affects the answer in the next sub-problem,  only the correct answer will receive credit.  Questions requiring written answers will obviously receive variable weights from the instructor.

Finally, all student questions must be asked and posed before the FINAL CLASS PERIOD.  Office hours are officially over on the last day of class.  There will be no special study sessions prior to test dates as these sessions do not allow all students equal chance to attend given work and other commitments.

Academic Honesty:  All students are expected to do their own test work.  Any student found to be cheating will be handled according to the regulations in the University Catalog.

On Line Link:  An On Line Link to Statistics that you may find of value is This link provides you with access to the statistical world.  You may want to explore that world when you have time. In fact,  if you happen to be somewhere and don't have access to the statistical program that is used in this class,  you can consult this page and consult "statistical calculations right on your web browser" and have most any calculations performed on line.

Instructor: Dr. Ed Knight
Office Location: Business Administration Bldg. 229A
Office Telephone: (731)587-7351
e-Mail Address:

Office Hours:  Office hours will be posted each semester. However,  by sending me an e-mail, a specific time during office hours can be mutually arranged for student assistance.  Another very profitable alternative for getting questions answered is to post your questions to the Communications button on the internet.  Try going to and locating the Mgt320 course.  You should be automatically registered in the course. You will find information about the course at this web site.   Included under the Communications Button is a button for e-mail communication.  This button will allow you to select a communication medium - either to a person individually or to the class as a whole.   Using this vehicle,  you can be in contact with the other students in the class.  They may be able to answer your question.  As the instructor, I will be monitoring the blackboard information and correct any faulty information.  Note:  If you have questions spectifically for me about an assignment or something of a particular nature, e-mail me directly and do not use the class communication selection.

The FINAL CLASS PERIOD will be the last date for student assistance.  All questions regarding the final exam must be asked before or during the final class so that all students will have equal opportunity to hear the answers to the questions.

SESSIONS #1-13.  Analyzing Single Variables:  Summary Statistics, Confidence Intervals, Sampling Error, Hypothesis Testing and Simulations:  Presto Pizza Company

In Session 1-13,  the concept of statistics and its application to business will be presented through the introduction of a case.  The initial case to be presented and discussed is the Presto Pizza Company.  The case will illustrate how the application of the basic univariate applications of statistics can be effective in not only solving business problems but also in evaluating potential solutions to problems.

The specific problem is given in the text and can also be found on line under the following link:  Introduction and Presto Pizza.
The presentation of the material will focus on the specific case with the background statistical knowledge and explanation of techniques given in the text. The remainder of the background knowledge necessary for the Presto Case is given in the following link:  Background Material (2).

Please note the following.  The notes that are herein linked to the web page are copyrighted. At this time,  the notes are for use only by my students. They can be downloaded by the students for their direct use but not reproduced commercially or for other purposes.  However, you will need a User Name and Password as the files are for use by registered University of Tennessee students only.  These access codes will be provided upon registration in the class.

The computer program that will be used to analyze statistical data is A Statistical Program (ASPW)  (see The program is available on the student computers on campus including the School of Business Lab in Room 27 and in the computers in the Humanities Building (IBM computers).  However,  if you have your own computer or would like to download to your own computer, you can click on the ASPW link.  When you click for the link,  you will be asked where the file should be saved.  You can either save it to a disk in your a:/ drive or you can install it into your permanent C:/ drive.  The program will guide you through the set up.   The School of Business Administration at UTM has obtained a site license that allows all UTM students to download the program onto their computers for use by the student.  Another option is to download the program to your DESKTOP and install on your computer by clicking on the Setup icon and following the installation instructions.  The ASPW program contains an alpha-numeric graphic program that is quick and efficient.  For more exotic data presentations,  an additional program called ASPG (A Statistical Program Graphics) is attached and can be downloaded to your DESKTOP and installed on your computer.  Please install these programs on your computer.

A computer program such as ASPW (or any other program) executes mathematical operations on data.  Data however must be collected and supplied to the computer program.  Many data files might be utilized in the class.  To begin, please download the computer file "pron386.sf" from the data link that follows.  The data files are already formatted for use in ASPW.  If you
require the files in ASCII format for downloading to another statistical program,  please let the instructor know.   The first data file that will be analyzed is PRON386.SF. The data link for files is Data Files  located on the UTM server.

One important concluding concept makes the Presto Pizza Case extremely interesting.  Since statistical data is normally kept in spreadsheet format,  the manipulation of those columns of data can often allow us to investigate "what if" scenarios and evaluate some possible problem alternatives.  For example, based on the statistical and judgmental analysis of the Presto Pizza Company, far more than 5% late pizzas can be expected.  Will our recommendation be to declare bankruptcy immediately or can we use the data to test some "what if" possibilities and provide Tony with some options that he may implement? For example,  what about a 30 minute guarantee,  or what about a new oven or a more efficient rearrangement of the facilities, or what about restricting the delivery radius that is guaranteed?  These and other alternatives can be assessed for their impact on the likely percentage of late pizzas.

At this point,  try to list a minimum of 25 ideas that might directly help reduce the percentage of late pizzas.  The concept of idea generation and decision making will be explored in relationship to generating ideas for solving the Pizza problem.  One of the best texts that I know that gives a clear indication of the relationship between generating ideas and decision making is the New Rational Manager by Charles Kepner. Without ideas and their economic analysis,  efficient utilization of financial assets will not be achieved as the incremental rate of return will not be properly integrated into the decision making sequence.

Generate Those Ideas First!!!!

Test #1 on Presto Pizza is primarily designed to encourage the students to be prepared to demonstrate competency in the basic text topics and computer techniques covered to date.  Half of the test (50%) will be based on the notes.  There will either be short answer and fill in the blank and/or multiple choice questions.  The multiple choice questions at the end of the first text section will be utitized.  The computer competency portion of the test will cover the Presto Pizza case.  Given that some of the material is still new in your mind,  I have provided a Review Sheet that can be utilized on the test.  The review sheet should help you in formulating the technique to use and the method for establishing the hypotheses and conclusions. Obviously, you will also need to be familiar with the computer usage.

Don't let this test eat you up!  Study hard and get the reward!

SESSIONS #14 -23.  Anaylzing Two Variables at a Time:  Regression, Correlation, Analysis of Variance and Crosstabs:
 Metro Realty Company

Metro Realty faces a crisis.  Two of the agency's former customers have recently made a charge to the Board of Realtors that the agency didn't represent their best interests.  In fact,  they felt that they had been encouraged to sell at substantially below market prices.  A recent article in the newspaper not only sparked their interest but also gave them evidence to potentially support their claim.  The agency had to dispel this allegation in order to continue to be an viable growing agency in their geographical area of concentration.  Your job is to assist James Gleason in analyzing his data in an effort to clarify the allegations and charges.   The questions for the case are found in the Metro Realty link.  The supporting text on the appropriate statistical technieques are given in the Two Variables at at Time link.  The appropriate data file is PREST386.SF.

Techniques that emphasize the analysis of two variables at a time will be emphasized in this case:  regression analysis, correlation analysis, analysis of variace and crosstabs.  However,  questions that review the one variable analytical techniques will be reviewed and also prove important in this case.  Finally,  a true multivariate techniques that handles 3 or more variables at a time will conclude the case and provide important insight into the problems that the company faces.

Test #2 will be similar to Test #1 in format.  Approximately 50% of the test will be on the notes and 50% of the test will be on computer usage and will cover the Metro Realty case.  The review sheet from the first test will be increasingly important to you so be sure to bring a paper hard copy to class. The associated multiple choice questions for test review are given in the Two Variables at a Time Muliple Choice link.

SESSIONS #24-30. Further Case Studies:
        Marketing Applications:  Cycle World
        Management Applicaton on Salary Discrimination:  Service Pro


Cycle World is a regional sport cycling company headquartered in Seattle but with 5 other branches in the Northwest.  They are interested in hiring a marketing agency,  Keels, Inc.,  to study their customer profiles and decide the type of national magazine advertising that would be most beneficial.  The specific information regarding the case is given in the text material line on Additional Cases.

The Keels Agency sampled 300 customer profiles from the existing customer base to find out more about customers that presently are attracted to Cycle World business.  Knowing this information,  Keels hopes to recommend to Cycle World the best way to spend a projected advertising budget of $240,000 to advertise in national magazines and to expand their market nationwide.    Each magazine selected results in an expenditure of about $80,000 when selected.  Of course,  Keels also must be paid.  Obviously, to earn their fees,  Keels should be able to increase the effectiveness of the selection process so that a reduced amount of advertising will be more effective and still allow them to earn their fees.


Service Pro, Inc. handles customer requests from telephone callers.  Three classifications of agents employeed, from new hirees to the most experienced represenatives.  A couple of years ago,  Service Pro decided to implement an affirmative action program in order to increase the percentages of minorities in its employment.  The company felt that the program had been successful.  However,  recently two minority employees have approached top management regarding alledged salary discrimination given that the minorities on the average are paid far less than the other employees.  Management has gathered data on the employees and has requested a full statistical study to determine if salary discrimination in any form exists.The specific information regarding the case is given in the text material line on Additional Cases.


The top management at Fabor Manufacturing Co. has decided that a reward system should be developed to motivate employees.  In fact,  a bonus pool of money has been established to be divided up among the top 10% of the employees.  In order to identify these employees,  the company has decided to use last year's supervisor's ratings of the employees.

Numerous strategies have been suggested to find the best 10% of the employees but some real problems seem apparent as the actual implementation approaches.

As an added portion of the case,  the data will be transferred to as ASCII format and them exported to a standard spreadsheet appliciation (Microsoft Excel) where one particular aspect of the analysis might be more easily handled.  This exercise will also illustrate how data can be imported and exported to the ASP Statistical package.  This procedure might be especially useful since many databases are maintained in standard spreadsheet form.

The data file for the case can be found in the data link under "glenco.sf".  The list of directed questions can be found in the EmployeeBonusProgram link.


      The final examination will be a case that will be analyzed by the student which the student has never seen before.  Thus,  the entire focus of the material on statistical analysis will be utilized.  The student will have a list of specific questions about the data base set that will need to be answered.  These questions will range from analysis of the data set and its appropriateness, individual variables,  transformation of the data bases,  examining two variables at a time, and three or more variables at a time, interaction and other topics covered in the course. .
      Finally,  about 10% to 15% of the final exam grade will be a submitted written analysis of your examination of the problem and how you would present your facts to "suggest an appropriate quantitative analysis of the problem, what should be done, and your recommendation".  Thus,  the cases that were presented in the course serve as examples of the type of work and response needed to insure the highest quality of work.

     GOOD LUCK ON YOUR FINAL!  I hope that this presentation of statistics has heightened your interest in the study of numbers and how the "detection and evaluation of patterns in uncertain information" can be exciting and rewarding.  Other courses which you may find just as valuable are "Statistical Process Control" and "Design of Experiments".  These courses are also applications oriented and based on many years of experience in consulting and on academic teaching.  Many students and company employees find these courses of great practical experience while also earning academic credentials.