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Case 1 � Abigail Faith: Statistical Analysis of Pricing Compliance in AFB Company's Software Licensing Model

A case study analyzing pricing compliance in AFB Company's software licensing model using statistical methodologies.

Michael Davis
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10 months ago
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1CASE 1–Abigail FaithThis problem is one which I worked on as a consultant. Nothing is changed except the name ofthe CEO and the company.Abigail Faith is the CEO of AFB Company, a purveyor of computer-aided design software.Abigail has instructed her distributor that her software should be licensed to industrial customersat annual fees, F, which should depend principally on two factors-the number of designers, D,and the number of work stations, W, at each company, according to the following relation:F = X DYWZ,where X = 1000, Y = .55, and Z = .15While Abigail allows her distributorssome latitude in pricing in order to "get the sale," she'sconcerned that her instructions may not have been taken seriously. Based on the following data(random sample of 50 clients), the question is whetherthereisevidence that Abigail's guidelinesare not being observed.ClientDesigners(D)Work Stations(W)Annual Fee(F)15010$12,1462394172$21,0303535288$21,659423613$14,9515266264$32,0216363148$23,086724417$25,2288182116$18,5759543525$38,066108772$9,0421189151$20,01012561499$52,97813978790$40,36414821469$45,34015675582$61,62916863779$30,52217612456$48,15718884275$36,763197535$10,4222051776$15,12521192173$11,8362232429$23,531235552$7,79824787111$27,471

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Business Law

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