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Course Title: Data Analysis and Business Analytics

Assessment Title: Competency 1 Assessment

Points: 100

Assignment Directions

Read the scenario, part 1, part 2, and the rubric before beginning your

assignment.

Scenario

Pastas R Us, Inc. is a fast-casual restaurant chain specializing in noodle-based

dishes, soups, and salads. Since its inception, the business development team has

favored opening new restaurants in areas (within a 3-mile radius) that satisfy the

following demographic conditions:

• Median age between 25 and 45 years old

• Household median income above national average

• At least 15% college-educated adult population

Last year, the marketing department rolled out a loyalty card strategy to

increase sales. Under this program, customers present their loyalty card when paying

for their orders and receive some free food after making 10 purchases.

The company has collected data from its 74 restaurants to track important

variables such as average sales per customer, year-on-year sales growth, sales per sq.
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ft., loyalty card usage as a percentage of sales, and others. A key metric of financial

performance in the restaurant industry is annual sales per sq. ft. For example, if a

1,200 sq. ft. restaurant recorded $2 million in sales last year, then it sold $1,667 per

sq. ft.

Executive management wants to know whether the current expansion criteria

can be improved; evaluate the effectiveness of the loyalty card marketing strategy;

and identify feasible, actionable opportunities for improvement. As a member of the

analytics department, you’ve been assigned the responsibility of conducting a

thorough statistical analysis of the company’s available database to answer executive

management’s questions.

Part 1: Descriptive Statistics Analysis

Conduct the following descriptive statistics analyses using the Pastas R Us,

Inc. data set in Microsoft Excel. Answer the questions in the spreadsheet or separate

Microsoft Word document.

Insert a new column in the database that corresponds to AnnualSales.

AnnualSales is the result of multiplying a restaurant’s SqFt by Sales/SqFt.

Calculate the following:

• mean

• standard deviation

• skew
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• 5-number summary

• interquartile range (IQR) for each of the variables

Create a box-plot for the AnnualSales variable and answer the following

questions:

• Does it look symmetric?

• Would you prefer the IQR instead of the standard deviation to describe this

variable’s dispersion? Why or why not?

Create a histogram for the Sales/SqFt variable and answer the following

questions:

• Is the distribution symmetric? If not, what is the skew?

• Are there any outliers? If so, which one(s)?

• What is the SqFt area of the outlier(s)? Is the outlier(s) smaller or larger

than the average restaurant in the database? What can you conclude from this

observation?

• What measure of central tendency is more appropriate to describe

Sales/SqFt? Why?

Cite references to support your assignment.

Part 2: Report
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Write a 750- to 1,000-word statistical report with the following sections:

• Section 1: Scope and Descriptive Statistics

• Section 2: Analysis

• Section 3: Recommendations and Implementation

Section 1: Scope and Descriptive Statistics

• State the report’s objective.

• Discuss the nature of the current database. What variables were analyzed?

• Summarize your descriptive statistics findings from Part 1. Use a table and

insert appropriate graphs.

Section 2: Analysis

• Using Microsoft Excel, create scatter plots and display the regression

equations for the following pairs of variables:

o BachDeg% versus Sales/SqFt

o MedIncome versus Sales/SqFt

o MedAge versus Sales/SqFt

o LoyaltyCard(%) versus SalesGrowth(%)

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• In your report, include the scatter plots. For each scatter plot, designate the

type of relationship observed (increasing/positive, decreasing/negative, or no

relationship) and determine what can be concluded from these relationships.

Section 3: Recommendations and Implementation

• Based on your findings above, assess which expansion criteria seem to be

more effective. Is there any expansion criterion that could be changed or eliminated?

If so, which one and why?

• Based on your findings above, does it appear as if the loyalty card is

positively correlated with sales growth? Would you recommend changing this

marketing strategy?

• Based on your previous findings, recommend marketing positioning that

targets a specific demographic. (Hint: Are younger people patronizing the

restaurants more than older people?)

• Indicate what information should be collected to track and evaluate the

effectiveness of your recommendations. How can this data be collected? (Hint: would

you use survey/samples or census data?)

Cite references to support your assignment

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Data Analysis and Business Analytics Assessment: Competency 1 Assessment

Part 2: Report

Student name

Institution

Instructor

Date
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Section 1: Scope and Descriptive Statistics

Objective:

The purpose of this study is to examine the database of Pastas R Us, Inc. in order

to address the inquiries of the executive management on the efficiency of the existing

growth criteria, the success of the loyalty card marketing plan, and identify practical

chances for improvement.

Database:

The database comprises data from 74 restaurants, encompassing variables such as

average sales per customer, year-on-year sales growth, sales per square foot, loyalty card

usage as a percentage of sales, and other factors (namely, Sales/SqFt, SqFt, BachDeg%,

MedIncome, MedAge, LoyaltyCard(%), and SalesGrowth(%)).

Descriptive Statistics Findings:

Descriptive Sales/ SalesGrowt LoyaltyCar Sales/ MedInco MedA BachDe AnnualSal

Statistics SqFt Person h% d% SqFt me ge g% es

2580. 1059381.3
Mean 47 7.04 7.41 2.03 420.31 62807.70 35.20 26.31 1
2500. 1035749.2
Median 00 7.00 7.03 2.08 396.01 62757.00 35.00 26.50 1
Standard 372.3
Deviation 8 0.30 6.58 0.55 136.31 17782.89 3.63 6.96 278522.25

Skewness 0.53 0.90 0.49 -0.76 1.24 0.30 -0.17 0.14 0.36
1251.
Minimum 00 6.54 -8.31 0.29 178.56 32929.00 24.70 14.00 499968.00
3799. 114353.0 1746600.0
Maximum 00 7.97 28.81 3.38 987.12 0 43.50 40.00 0
2400.
Q1 00 6.83 3.98 1.86 332.85 46953.00 32.53 20.25 877477.58
2735. 1210806.4
Q3 25 7.18 11.42 2.33 483.56 76194.25 37.53 30.75 8
335.2
ICR 5 0.35 7.44 0.47 150.72 29241.25 5.00 10.50 333328.91
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Box-Plot for AnnualSales:

The box plot for AnnualSales exhibits asymmetry. The interquartile range (IQR) is

better for characterizing this variable's dispersion than the standard deviation. Since the

IQR is a robust spread metric, outliers are less likely to alter it as stated by Hoaglin et al.

(2019).

Histogram for Sales/SqFt:

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The distribution has positive skewness, suggesting asymmetry. The database

contains anomalies with SqFt areas bigger than usual restaurant sizes. The median is the

best central tendency metric for Sales/SqFt since it compensates for outliers. (McClave et

al., 2013).

Section 2: Analysis

Scatter Plots and Regression Equations:

BachDeg% versus Sales/SqFt

BachDeg% Vs Sales/SqFt
45

40

35 f(x) = 0.0174530982963317 x + 18.9751792557907

30
BachDeg%

25

20

15

10

0
100.00 200.00 300.00 400.00 500.00 600.00 700.00 800.00 900.00 1,000.00 1,100.00

Sales/SqFt

The scatter plot below demonstrates a clear positive correlation between the

presence of college graduates and the profitability of local restaurants. This phenomenon

may be attributed to the fact that individuals with advanced levels of education often earn
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higher earnings and possess a larger inclination to use their financial resources towards

eating out (Rust & Huang, 2012).

MedIncome versus Sales/SqFt

MedIncome Vs Sales/SqFt
140000

120000

100000

80000
MedIncome

60000 f(x) = − 2.92771655646455 x + 64038.2377968797

40000

20000

0
100.00 200.00 300.00 400.00 500.00 600.00 700.00 800.00 900.00 1,000.00 1,100.00

Sales/SqFt

The scatter plot demonstrates a somewhat negative correlation between median

income and sales per square foot. Put simply, as median income increases, there is often a

fall in sales per square foot, but there may be some variation in the statistics. This link

implies that restaurants located in locations with a higher median income have a lower

sales per square foot. This phenomenon may be attributed to the fact that persons with

higher earnings often possess more disposable cash for eating out. As a result, the sales per

square foot in these regions may be comparatively lower.

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MedAge versus Sales/SqFt

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MedAge Vs Sales/SqFt
50.0

45.0

40.0

35.0
f(x) = − 0.00159207388299759 x + 35.87050861018
30.0
MedAge

25.0

20.0

15.0

10.0

5.0

0.0
100.00 200.00 300.00 400.00 500.00 600.00 700.00 800.00 900.00 1,000.00 1,100.00

Sales/SqFt

The scatter figure demonstrates a modest negative correlation between median age

and sales/sqft. Median age weakly reduces sales/sqft. Due to restricted income and less

eating out, older people may be more prone.

The median age-sales/sqft negative correlation has numerous factors. Seniors may

seek long-term homes. Older or smaller homes may affect sqft sales. Rural or decaying

areas may house more seniors.

LoyaltyCard(%) versus SalesGrowth(%)

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LoyaltyCard% Vs SalesGrowth%
4.00

3.50

3.00

2.50
LoyaltyCard%

f(x) = − 0.0247474139866307 x + 2.20996515148142

2.00

1.50

1.00

0.50

-
-15.00 -10.00 -5.00 0.00 5.00 10.00 15.00 20.00 25.00 30.00 35.00

SalesGrowth%

A negative correlation in the scatter plot shows that restaurants that employ loyalty

cards have lower sales growth. This is possible because loyalty card holders are more

likely to make multiple purchases, although they may not spend much at the restaurant

every visit (Hannan et al., 2014).

Section 3: Recommendations and Implementation

The statistical analysis conducted in the preceding sections will provide valuable

insights that will guide the formulation of practical and effective suggestions in this

particular area. Pastas R Us, Inc. may use these recommendations to enhance its criteria

for growth and its marketing strategies for loyalty cards. We will further explore strategies

for targeting marketing efforts towards certain demographic groups, as well as ways for

gathering data to assess their effectiveness.

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1. Evaluation of expansion criteria:

Given the negative link between median income and sales per square foot, Pastas R

Us should reconsider its median income expansion requirement. This criteria was formerly

more important, but wealthy restaurants had fewer sales per square foot. The company

must consider additional factors to boost sales. (Smith et al., 2015).

2. Loyalty Card Marketing: The inverse correlation between use and revenue

growth weakens the effectiveness of current techniques. Examine the loyalty card program

to determine its impact on sales. An approach to address this might include analyzing the

purchase behaviors of loyalty card members to see whether adjustments or alternative

marketing strategies are necessary for achieving sales growth (Hannan et al., 2014).

3. Targeted Marketing: Pastas R Us may increase marketing by targeting

demographics. Locations with more college-educated individuals sell more per square

foot, as seen by the positive correlation between BachDeg% and sales/sqft. Market to

these locations to boost sales (Rust & Huang, 2012).

4. Collect data for evaluation.

Tracking the effectiveness of these guidelines requires relevant data. Data might

include customer demographics, purchases, and loyalty cards. Surveys, population data,

and customer records may be useful. By routinely reviewing this data, Pastas R Us can

determine how expansion criteria, loyalty card procedures, and targeted marketing effect

sales. (Smith et al., 2015).

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The last section offers Pastas R Us, Inc. detailed and practical advice. A statistical

examination of the company's data suggests improving expansion criteria, loyalty card

operations, and targeted marketing. Effective data collection and assessment are needed to

evaluate these concepts and improve company growth and profitability.

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References

Hannan, L., Roa, J., & Solis, I. (2014). Impact of loyalty programs on customer retention.

European Journal of Economics, Finance and Administrative Sciences, 61, 132-

139.

Hoaglin, D. C., Mosteller, F., & Tukey, J. W. (2019). Understanding robust and

exploratory data analysis. John Wiley & Sons.

McClave, J. T., Benson, P. G., & Sincich, T. (2013). Statistics for Business and

Economics. Pearson.

Rust, R. T., & Huang, M. H. (2012). The service revolution and the transformation of

marketing science. Marketing Science, 31(1), 1-6.

Smith, J. R., & Fletcher, K. (2015). Turning market orientation inside out: A multi-level

perspective. Journal of the Academy of Marketing Science, 43(2), 121-135.