KHA350 Lecture Notes - Lecture 4: General Linear Model, Multivariate Analysis Of Variance, John Tukey

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tealporpoise102

25 Jun 2018

School

University of Tasmania

Department

KHA

Course

KHA350

Professor

Assoc Prof Raimondo Bruno

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Research methods week 4: Two Factor ANOVA

- If not statistically significant but a considerable magnitude of effect size, don’t

need to increase sample size or change the alpha level

oEffect size should be enough

oWe tend to overly worship p values

- One way ANOVA: only one independent variable or factor

oBut can have two or more levels

- Two way ANOVA: Two factor ANOVA

oFACTOR- INDEPENDENT VARIABLE- FACTOR CAN ALL BE

USED INTERCHANGEABLY i

oTwo IVs with one DV

oEACH iv CAN HAVE MULTIPLE levels

oUsually written as an a x b design

Where a and represent the number of levels in factors A and B

respectively

End of semester exam

oRequires an assessment of how the two variables interact to affect the

How do the IV’s impact on the DV: When there are multiple

ones, we are interested in

Individual effect

How they interact with each other to have an impact on

the DV

- Example: Eysenck study

oExtension of One-way ANOVA added age as an IV

o5 x (by) 2 experimental design

oAge: between subjects variable

oCondition: look for phrases in the write up to work out whether

between or within subjects design

People were allocated to one of five conditions

Between subjects independent variable

oSummarize mean scores for each condition in a table

Cell means: means within the cells of the table

Marginal means: means in the margin of the table (average

score in row or column regardless of the condition or age they

are in)

Marginal means of age

Marginal means for condition

oMain effects and interactions:

2 IV’s

allows us to ask a number of questions about how these effect

the DV

1. Is there an overall effect of age on recall, regardless of

condition?

To test this, look at difference between old and you

regardless of condition

Testing marginal means

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The main effect of age: its effect ignoring the other

effects

Need to be able to find these marginal means in SPSS

output

2. Is there an over effect of learning condition on recall,

regardless of age?

Marginal means of condition

Main effect of condition

3. Is there an interaction between condition and age?

Is the effect of condition on recall the same for both you

and old participants?

Examine the cell means for each combination of age

and condition

This is referred to as the interaction between age and

condition

Each of the ten different cell means in compared

If significant interaction: the effect of IV a is not the same for

all IV levels of b

The effect for age on DV is not the same at each of the different

learning conditions

If non-significant: the effect of IV is consistent at all levels of

IV b

The effect is the same

“a significant interaction tells you whether consistent or not…’

- One Way ANOVA calculations:

oScore = grand mean + treatment error + residual error

oCompare the amount of variation due to the group they are in,

compared to the total error

- Two way ANOVA calculations:

oAdding more IVs just means adding further to the model

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Document Summary

If not statistically significant but a considerable magnitude of effect size, don"t need to increase sample size or change the alpha level: effect size should be enough, we tend to overly worship p values. One way anova: only one independent variable or factor: but can have two or more levels. Two way anova: two factor anova: factor- independent variable- factor can all be. Used interchangeably i: two ivs with one dv, each iv can have multiple levels, usually written as an a x b design. Where a and represent the number of levels in factors a and b respectively. End of semester exam: requires an assessment of how the two variables interact to affect the. How do the iv"s impact on the dv: when there are multiple ones, we are interested in. How they interact with each other to have an impact on. People were allocated to one of five conditions.

Related Questions

Aside from cost-based system pricing , what better method is appropriate for this case, state reason why.

I. SYNTHESIS

Refreshing beverages such as fruit shake and smoothies have become the quickest way to beat the heat, especially during dry season. Over the last two years, Pearly Shake has become known as a quench thirst for people living near Galas Market. Acclaimed to be the only flavored shake business located in the area with its affordable beverages ranging from â±25.00 for the regular size shake and â±30.00 pesos for large size shake with a topping of your choice. According to Ms. Analyn Lim, owner of Pearly Shake, her business makes â± 15,000 to â±17,000 average sales per day. Pearly Shake offers variety of flavors (in powdered form) such as bubblegum, double-dutch, strawberry, vanilla, chocolate and ube.

As what the owner have said âa micro-scale business do not require much investment, an entrepreneur can start his own business with a small capital. Nowadays, customers have high tend to consumption product of milk and sugar but they have few choices to choose from so I set-up Pearly Shake try to create the demand for my customersâ.

In addition, Analyn Cheng employs three personnel for her business. She pays them â± 250.00 per day inclusive of free breakfast, lunch, and dinner. The establishment is open from 10:00 am to 7:00 pm, Monday to Sunday. Ms. Cheng usually travels from Galas Quezon City to Divisoria, once a month to buy powdered shake flavors, straws, plastic cups, sugar, cream, whole milk.

II. OBJECTIVES

â¢ To create a strong product awareness.

â¢ To achieve an increasing number of loyal consumers.

â¢ To maintain a positive, strong growth of the micro-enterprise each year.

III. POINT OF VIEW

This final paper will take the point of view of Pearly Shakeâs owner, Analyn Cheng.

IV. STATEMENT OF THE PROBLEM

This paperâs approach emphasizes the importance of CVP analysis and how it ties directly into planning and control processes management must take in order to manage a successful business.

This paper seek to answer the question: How can Ms. Cheng fully improve the its pricing system?

V. GUIDE QUESTIONS

1. Using the below information, determine the number of shakes that will need to sell to break even.

DIRECT MATERIAL INGREDIENTS	Small (8 oz. size)	Large (12.oz size)
Condensed Milk (â± 41. 50 for 300 mL)	20mL or 0.676 fluid ounce	30 mL or 1.017 fluid oz
Sugar (â±500.00 for 15 lb bag = 30 cups)	1/2 cup of sugar	3/4 cup of sugar
Flavorings	.25 per shake	.40 per shake
Specialty Straws	.75 straw	.75 straw
Cups (100 8 oz. cups at a cost of â±150.00)
Cups (100 12oz. cups at a cost of â±185.00)



Fixed cost:
Rent : â±5,000 a month
Cleaning and other miscellaneous supplies	â±2,000 a month
Equipment: Industrial Milk Shake Maker:	â±2,500 per machine X 3 machine = â± 7,500
Equipment: Refrigerator : â±4,500
Licenses and permits: â±1,050 a year
Owner's salary: â±180,000 a year

Employees
Three full-time employees: each receiving a daily salary of â±250.00 Sales Mix: Large 60% , 40% small sized shake

Computation of Variable Cost per Unit :

	Small	Large
Condensed Milk	2.77	4.15
Sugar	8.33	12.50
Flavorings	0.25	0.40
Speciality Straws	0.75	0.75
Cup	1.50	1.85
Direct Material Cost per Shake	13.60	19.65

Contribution Margin per Unit :

Selling Price per Shake	25	30
Variable cost per Shake	13.60	19.65
Contribution Margin per unit	11.40	10.35

Total Fixed Cost per year :

Employee Salary ( 250 x 3 x 365 )	273,750
Owners Salary	180,000
Licenses and Permits	1,050
Rent	60,000
Cleaning and other supplies	24,000
Depreciation ( 7,500 + 4,500)	12,000
Total Fixed Cost per Year	550,800

At break-even point, Total Contribution Margin = Total Fixed Cost

Let the break-even quantity be Q.

Since the sales mix is 60 % large and 40 % small, the equation can be expressed as,

11.40 x 0.4 Q + 10.35 x 0.6 Q = 550,800

or 4.56 Q + 6.21 Q = 550,800

or 10.77 Q = 550,800 or

Q = 51,142 shakes.

Small shakes: 51,142 x 40% = 20,456.8

Large shakes: 51,142 x 60% = 30,685.2

In value terms, break-even point :

Small shakes : 20,456.8 x 25 = 511,420

Large shakes : 30,685.2 x 30 = 920,556

Total break-even sales = â± 1,431,976

VI. CONCEPTUAL FRAMEWORK AND AREAS OF CONSIDERATION:

The researcher will be using SWOT analysis in assessing the businessâs status.

SWOT

PEARLY SHAKE

STRENGTHS

Strong existing distribution channel

Brand strengths and uniqueness

WEAKNESSES

Unavailability of some flavorings.

Lack of segregation of duties with regards to the different functions of the business.

OPPORTUNITIES

Brand is attractive to consumers

The location of the business is in a crowdy place.

THREATS

Downward Price Pressure

Brand susceptibility

In this study, one known factor which influenced the earning of profit is the level of production (i.e., volume of output). Cost-volume-profit (CVP) analysis examines the relationship of costs and profit to the volume of business to maximize profits. There may be a change in the level of production due to many reasons, such as competition, introduction of a new product, trade depression or boom, increased demand for the product, scarce resources, change in selling prices of products, etc. In such cases management must study the effect on profit on account of the changing levels of production. A number of techniques can be used as an aid to management in this respect.

One such technique is the cost-volume-profit analysis. The term cost volume profit analysis is interpreted in the narrower as well as broader sense. Used in its narrower sense, it is concerned with finding out the âcrisis pointâ, (i.e., break-even point) i.e., level of activity when the total cost equals total sales value. In other words, it helps in locating the level of output which evenly breaks the costs and revenues. Used in its broader sense, it means that system of analysis which determines profit, cost and sales value at different levels of output. The cost-volume-profit analysis establishes the relationship of cost, volume and profits.

VII. ALTERNATIVE COURSES OF ACTION

To properly cite the correct costing strategies of the business, Analyn will be addressing a lot of problem of that she is facing. To help her address these issues, the researcher has come with the following alternative courses of actions:

Alternative Courses of Action 1: Analyn can fully improve the cost of Pearly Shake by introducing cost-based pricing where the price includes the cost of ingredients and cost of operating the business.

Cost based pricing is the easiest way to calculate what a product should be priced at. The owner can do it by:

â¢ include a profit percentage with product cost

â¢ add a percentage to an unknown product cost

â¢ blend of total profit and product cost

Alternative Courses of Action 2: Retain the pricing system of Pearly Shake.

Making a profit means structuring the business so that it stands out from the competition and offers customers something they canât get anywhere else. It also means paying attention to costs as well as income, avoiding unnecessary expenses and getting creative in seeking new revenue streams, by retaining the same pricing system of Pearly Shake.

Alternative Courses of Action 3:

KHA350 Lecture Notes - Lecture 4: General Linear Model, Multivariate Analysis Of Variance, John Tukey

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