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

Preview 2 of 6 pages

See the first 2 pages exactly as they appear in the document.

Page 1
Read page 1 as text
1 CASE 1 – Abigail Faith This problem is one which I worked on as a consultant. Nothing is changed except the name of the 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 customers at 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 D Y W Z , where X = 1000, Y = .55, and Z = .15 While Abigail allows her distributor s some latitude in pricing in order to "get the sale," she's concerned that her instructions may not have been taken seriously. Based on the follo wing data (random sample of 50 clients) , the question is whether there is evidence that Abigail's gu idelines are not being observed. C lient Designers (D) Work Stations (W) Annual Fee (F) 1 50 10 $12,146 2 394 172 $21,030 3 535 288 $21,659 4 236 13 $14,951 5 266 264 $32,021 6 363 148 $23,086 7 244 17 $25,228 8 182 116 $18,575 9 543 525 $38,066 10 87 72 $9,042 11 891 51 $20,010 12 561 499 $52,978 13 978 790 $40,364 14 821 469 $45,340 15 675 582 $61,629 16 863 779 $30,522 17 612 456 $48,157 18 884 275 $36,763 19 75 35 $10,422 20 517 76 $15,125 21 192 173 $11,836 22 324 29 $23,531 23 55 52 $7,798 24 787 111 $27,471
Page 2

4 more pages in the full document

Unlock it once and it stays in your library, ready to chat with or turn into flashcards.