BUSS 1020 Quantitative Business Analysis

Individual ASSIGNMENT
Semester 2, 2015
This assignment is worth 20% of your total mark.
It must be submitted online on the Blackboard course website at the link
provided. You must submit the assignment using the TURNITIN link by 4:00
pm on Wednesday, 28 October, 2015. Late assignments will be penalised at
10% (of the possible marks) for submission after due time on due date,
plus 10% per day late, including weekends.
The assignment must be done individually. Serious penalties may be
applied if a student is found to have engaged in plagiarism, including
possibly a mark of zero (0).
The assignment will be marked out of 60. Marks allocated for each question
are shown, adding up to 55 marks. Professional and clear presentation is a
required and assessed component in this assignment: 5 marks out of 60
are allocated specifically for that component.
A 15 page maximum limit applies to this assignment. As a guide,
assignments should be around 12 pages (say 10-14 pages) in order to
cover the tasks adequately.
You have recently taken on work as the quantitative business analyst for a company that
holds the DVD distribution rights for movies. The company wants to estimate the sales
revenue for each DVD movie it distributes. Currently, the company tends to follow some
adhoc guidelines to form these estimates. However, they have recently acquired some
data on DVD sales, and have hired you to help analyse it and assess or inform/improve
their DVD revenue estimation methods. The data are in the file Movie.xls, available on
the BUSS1020 Blackboard site. You are required to present and explain all your
assumptions and discuss whether they could be true, or not, in each case, in answering
each of the questions below.

Task 1 (10 marks) Data Summary and Visualization

The point of this task is to give an initial exploratory data analysis relevant to the goals of
the assignment and the analyses you will do in Tasks 2 and 3. The data consists of
variables regarding revenues generated by particular movies. Variables include the gross
box office revenue in millions and the revenue generated from the DVD of the same

Page 1 of 3

movies, also in millions. The dataset will be further analysed and used in Tasks 2 and 3,
which you should read now. So, please read Tasks 2 and 3.
Explore and present appropriate and relevant graphs and summary statistics for this data
set, focusing on those that are most relevant to each of the variables and questions in
Tasks 2 and 3. Discuss these graphs and statistics in a general and business context as
well as in the context of the questions in Tasks 2 and 3.

Task 2 (15 marks)

The company has always estimated DVD revenue differently, based on whether the box
office revenue was in excess of $100 million, or not. In fact the company usually
estimates that DVD revenue will be higher by $25 million when the box office revenue is
in excess of $100 million.
i.

Fully investigate the hypothesis that DVD revenues are larger on average
when the box office revenue is in excess of $100 million. State all required
assumptions, indicate your chosen level of significance (and why you chose it)
and give a plain-English business context conclusion.

ii.

Test the dealerships hypothesis that $25 million should be added to the
estimated DVD revenue, when the box office revenue is in excess of $100
million. Does the data support that hypothesis?

(Please do not repeat plots from Task 1 in your answer here, though you may
mention or refer to them)

Task 3 (25 marks)

The head of business intelligence and analytics in the company suggests that a regression
model be used to estimate DVD revenue instead. She also indicates her belief that DVD
revenue is approximately 25% of box office gross revenue. Using a regression analysis,
fully examine the questions:
i.

ii.

What is the effect of box office revenue on DVD revenue in this data? Does
box office revenue have a positive effect on DVD revenue? Is the effect
linear? How strong is the relationship?
Is the managers claim that DVD revenue is approximately 25% of box office
gross revenue at all accurate?

In answering this question, at the least you should:

- Perform the analysis/tests that answer the questions
- Show your regression output and results, which should include the regression
equation and R-square.

Page 2 of 3

Interpret the regression slope coefficient.

Perform relevant procedures to verify whether the assumptions of regression are
satisfied.
Show some regression fit plots.

(Please do not repeat plots from Task 1, though you may mention or refer to them if
you like. Other plots may be included)

Task 4 (5 points)
Write an executive summary (no more than 500 words) for the management of your
company regarding your analyses, their assumptions and your conclusions regarding
methods to estimate DVD revenues. Use plain English language as much as possible.

VARIABLES IN DATASET
Title The name or title of the movie.
Gross The gross revenue that movie generated at the box office.
DVD revenue - The revenue that movie generated in DVD sales.

END OF ASSIGNMENT

Page 3 of 3