Math Problem Statement

A sales organization conducted a study to explore sales​ strategies, processes, and support systems within businesses. Organizations were categorized by sales performance level​ (top performers vs. middle performers vs. bottom​ performers) and extent to which the organization invests in customer satisfaction. Results were organized into the accompanying contingency table. At the 0.01 level of​ significance, is there evidence of a significant relationship between sales performance level and level of investment in customer​ satisfaction? Top Middle Bottom Annually 59 303 43 Every 2 to 4 years 35 232 22 Never 9 155 28. Calculate the test statistic. chi Subscript STAT Superscript 2equals    enter your response here ​(Round to two decimal places as​ needed.) Part 3

Solution

To determine if there is a significant relationship between sales performance level and level of investment in customer satisfaction, we will use the Chi-Square Test of Independence. This test compares the observed frequencies to the expected frequencies under the assumption that the two variables (sales performance level and investment in customer satisfaction) are independent.

Steps to calculate the test statistic:

  1. Observed Frequencies: These are the values given in the contingency table:
Investment in Customer SatisfactionTop PerformersMiddle PerformersBottom PerformersRow Totals
Annually5930343405
Every 2 to 4 years3523222289
Never915528192
Column Totals10369093886
  1. Expected Frequencies: The expected frequency for each cell is calculated using the formula:

    Eij=(Row Totali×Column Totalj)Grand TotalE_{ij} = \frac{(\text{Row Total}_i \times \text{Column Total}_j)}{\text{Grand Total}} where EijE_{ij} is the expected frequency for the cell in the ith row and jth column.

  2. Chi-Square Statistic Formula: The test statistic is calculated as:

    χ2=(OijEij)2Eij\chi^2 = \sum \frac{(O_{ij} - E_{ij})^2}{E_{ij}} where OijO_{ij} is the observed frequency and EijE_{ij} is the expected frequency.

Let's compute these values.The calculated Chi-Square test statistic is approximately χ2=17.28\chi^2 = 17.28.

Would you like further details on the next steps, or do you have any specific questions?

Here are 5 related questions to explore:

  1. How do you calculate the degrees of freedom for the Chi-Square test?
  2. What is the critical value for the Chi-Square test at the 0.01 significance level?
  3. How do you interpret the Chi-Square test results?
  4. Can the Chi-Square test be used for continuous data?
  5. What are the assumptions of the Chi-Square test?

Tip: Always ensure that the expected frequencies in each cell are sufficiently large (generally at least 5) to apply the Chi-Square test reliably.

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Math Problem Analysis

Mathematical Concepts

Chi-Square Test of Independence
Contingency Table
Hypothesis Testing
Significance Level

Formulas

Expected frequency formula: E_{ij} = (Row Total_i * Column Total_j) / Grand Total
Chi-Square Statistic formula: χ² = Σ (O_{ij} - E_{ij})² / E_{ij}

Theorems

Chi-Square Test of Independence

Suitable Grade Level

Undergraduate Statistics / Advanced High School