Reference no: EM133566932

Quantitative Techniques

Case A: Regression Analysis

An apps developer for Fintech has commissioned a consultant firm to understand the desired features and the perception of use. The perception of use has been collected from different workstations and from different types of users. The independent characteristic or features will affect the attractiveness of the ease of apps. A higher level of perception (ease of use) will drive higher usage and higher profitability of the Fintech eventually.

The consultant perceived that the security level (independent variable) will drive better perception of use (dependent variable). The consultant will need to analyze the relationship of the security level with perception of use. A predictive regression will be used to predict the ability of security level to influence app usage.

A five-point Likert scale (1 for lowest and 5 for highest) has been used to measure the intended variables. The numbers are average of different users from 30 different workplaces and environments. Data has been tabulated as shown in the table below.

Question 1
1) The consultant will need to visualize the relationship in a scattered plot. Draw a scattered plot.
2) Is there a statistical relationship between the s security level (independent variable) with perception of use (dependent variable). Describe the relationship.
(Hint: You can solve it through manual computation or resolved through software or MS Excel analysis Tool pack)
3) State and interpreted the regressed model and equation. What will the predicted perception of use if app developer established the security level at 3?

	1	2	3	4	5	6	7	8	9	10
Security Level	2.5	3.2	4.5	4.3	3.6	3.8	4.6	4.7	2.4	2.8
Perception Use	1.3	3.5	4.7	4.8	4.1	3.9	4.8	5	3.1	3
	11	12	13	14	1$	16	17	18	19	20
Security Level	3.5	3.4	3.7	4.6	1.5	4.5	4.6	4.7	3.8	3.6
Perception Use	4.2	3.8	4.2	4.8	1.2	4.2	4.8	4.8	4.1	4
	21	22	23	24	2$	26	27	28	29	30
Security Level	3.50	3.80	3.80	4.30	4.80	2.80	3.20	3.20	3.10	3.00
Perception Use	3.8	4.2	4.2	4.8	5	2.8	3.6	4.1	3.8	3.5

Table 1: Data (sample 30) collected from 5 Points Likert Scale

Question 2

In addition, the amount of storage has affected users to install any application. The consultant has included the variable in their survey. The hypothesized relationship is shown in Figure 1. The regressed model is shown in Table 2 below as well.

Figure 1: Hypothesized Relationship

ANOVA
	df	SS	MS	F	Significance F
Regression	2	21.41750	10.70875	68.97064	0.0000
Residual	27	4.19216	0.15527
Total	29	25.60967
Coefficients       Standard Error            t Stat               P-value
Intercept	0.0005	0.3942	0.0012	0.9991
Security level	0.9526	0.4273	2.2295	0.0343
Storage Optimal	0.1255	0.4829	0.2598	0.7970

Table 2: Regressed Model #2

a) State the significant predictor and the multiple regression model.

b) Provide a short summary or recommendation to the Fintech software developer.

Case B: Quantitative Decision Analysis

There is the opportunity Andaman Sdn Bhd. to expand business to construct a new warehouse for an existing e-commerce company. The are two options. The first option is to expand at site A and the other option is to expand at site B. Both site A and B offer different payoffs with different levels of investment. The company can either expand at site A (RM6 million construction cost) OR site B (RM10 million construction cost). The project manager wanted to evaluate the options for a project (new warehouse) expansion objectively based on the expected monetary value (EMV).

The TWO possible options are listed in Table 2 below:

Option	Payoff
Site A	Site A has a favorable outcome of 60% with RM15 million estimated profit and an unfavorable 40% chance of RM2 million estimated profit.
Site B	Site B has a favorable outcome of 70% RM30 million estimated profit and an unfavorable 30% chance of RM6 million estimated profit.

Table 3: Option payoff and investment at Project at Site A and B

Question 3
a) As a consultant, explain to the construction manager the benefits of using a decision tree to determine EMV.

b) Based on this scenario (draw a decision tree with EMV), state your recommendation to the construction manager.

Question 4
Based on real example - for example at work, business or relevant business or social associates- state an application of quantitative and qualitative business interpretation created value.

You will state a scenario. Provide (mockup) a few numerical examples (shown in table or graphs). State how it has been used to provide value.