The Mean Corporation has two major franchise operations each with many outlets a
ID: 3042336 • Letter: T
Question
The Mean Corporation has two major franchise operations each with many outlets across the country: a coffee house franchise and a fast food franchise. For both franchises, a statistician has collected and analyzed data for the annual profits of the outlets. Figures for the means and standard deviations are presented in the table below.
John Q owns both a coffee and fast food franchise. His annual profit for the coffee house is $396,600 and his annual profit for the fast food franchise is $707,300.
a)Calculate the standardized values for both franchises. Give your answer rounded to 1 decimal place.
Coffee standardized value = ?
Fast food standardized value = ?
b)Relative to the rest of the outlets in each group, John's coffee franchise is performing ______ than his fast food franchise. (Choose one of the answers below to fill in the blank)
A. Better
B. Worse
Franchise Mean($) Standard
deviation
($) Coffee 291,000 44,000 Fast food 543,500 91,000
Explanation / Answer
a) Coffee standardized value = (396600 - 291000)/44000 = 2.4
Fast food standardized value = (707300 - 543500)/91000 = 1.8
b) Since coffee's z score is more, John's coffee franchise is performing better than his fast food franchise.
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