Many companies find that the implementation of total quality management eventual

Question

Many companies find that the implementation of total quality management eventually results in improved sales. Companies that fail to adopt quality efforts lose market share in many cases or go out of business. One measure of the effect of a company's quality improvement efforts is customer satisfaction. Suppose Delta Wire hired a research firm to measure customer satisfaction each year. The research firm developed a customer satisfaction scale in which totally satisfied customers can award a score as as 50 and totally unsatisfied customers can award scores as low as o. The scores are measured across many different industrial customers and averaged for a yearly mean customer score. Do sales increase with increases in customer satisfaction scores? To study this notion, suppose the average customer satisfaction score each year for Delta Wire is paired with the company's total sales of that year for the last 15 years, and a regressi on analysis is run on the data. Assume the following Minitab and Excel outputs are the result. Suppose you were asked by Delta Wire to analyze the data and summarize the results. What would you find?

Explanation / Answer

From the results of both minitab and Excel output it is evident that the Sales figure is highly dependent on (positively) Customer satisfaction. but if we test the regression coefficient beta against zero the test may be accepted at 5% level of significance. but the adjusted R square and R square are almost similar in strength. it implies that the independent variable is efficient in explain the total variability of the dependent variable. on the other hand the F statistics suggest the rejection of the null hypothesis.

hence the regression model is being rejected and we may conclude that customer satisfaction is not capable of explain the sales overall.

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