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Statistics Final Project

# Statistics Final Project - Case 32 Michelle Baker GM 533...

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Case 32 Michelle Baker GM 533 Applied Managerial Statistics Professor davis [email protected] November 15, 2010 Executive Summary In this case the objective is to determine whether or not the amount of days a bill is overdue is related to the amount of the bill. Quick Stab Collection Agency (QSCA) is a bill collector located in an eastern town. They avoid risky collections and tend to work with small accounts. This is largely in part because they can be very profitable by buying a \$60 debt for \$10. They then send one letter than appears very official and tends to get a quick return on their investment. As you will see by the calculations and statistical analysis performed, that the type of bill is the best predictor of how many days overdue a bill will be. Introduction QSCA’s profitability relies largely on how quickly they collect a debt payoff and the size of the bill. Of course the discount rate is also a variable in relation to their profitability. For reference type 1 are residential accounts and type 2 are commercial accounts. Based on a random sample of closed accounts from January through June a data set was yielded to be analyzed. The goal would be to see if there is a relationship between number of days and the size of the bill. The data set include three variables. The dependent variable is days (Y). The independent variables are amount of bill (X 1 ) and type of bill (X 2 ). The scatter plots give us a visual of the relationship of the independent variables separately (Appendix A and Appendix B). The first is the graph of the number of days and the size of the bill. As you can see there is not a positive or

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negative relationship between the two variables. The second graph is of the number of days and the type of bill. The slope indicates that there is a relationship between the type of bill and the number of days the bill is overdue.
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