The Case Problem “Finding the Best Car Value” description and the data is given at the end of chapter 12.
100 Points
As usual, I expect perfect English. I desire solid descriptions of the findings from your analysis addressing
all the requirements of the assignment given below and items asked for in the case.
Assessment Criteria
Findings and answer to questions
60 points
Critical thinking evaluation of the data, comments and discussions
30 points
Presentation
10 points
Total
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•
•
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100 points
Answer all the questions within a business report. In your report make sure all the questions are
answered and addressed explicitly. Add your critical evaluation of the situation and the analysis
method used to develop better models to answer these questions if possible.
You are required to work in groups of two students and submit only one report. You also need to
make a statement about the contribution of each team member.
One submission per team in pdf format.
You are not allowed to use more than 8 pages.
Cost/
Price
($)
Mile
Car
Nissan Altima 2.5 S (4-cyl.)
23,970.00 0.59
Kia Optima LX (2.4)
21,885.00 0.58
Subaru Legacy 2.5i Premium 23,830.00 0.59
Ford Fusion Hybrid
32,360.00 0.63
Honda Accord LX-P (4-cyl.)
23,730.00 0.56
Mazda6 i Sport (4-cyl.)
22,035.00 0.58
Hyundai Sonata GLS (2.4)
21,800.00 0.56
Ford Fusion SE (4-cyl.)
23,625.00 0.57
Chevrolet Malibu LT (4-cyl.) 24,115.00 0.57
Kia Optima SX (2.0T)
29,050.00 0.72
Ford Fusion SEL (V6)
28,400.00 0.67
Nissan Altima 3.5 SR (V6)
30,335.00 0.69
Hyundai Sonata Limited (2.0T) 28,090.00 0.66
Honda Accord EX-L (V6)
28,695.00 0.67
Mazda6 s Grand Touring (V6) 30,790.00 0.74
Ford Fusion SEL (V6, AWD) 30,055.00 0.71
Subaru Legacy 3.6R Limited
30,094.00 0.71
Chevrolet Malibu LTZ (V6)
28,045.00 0.67
Chrysler 200 Limited (V6)
27,825.00 0.70
Chevrolet Impala LT (3.6)
28,995.00 0.67
RoadTest
Score
91
81
83
84
80
73
89
76
74
84
80
93
89
90
81
75
88
83
52
63
Predicted
Reliability
4
4
4
5
4
4
3
4
3
4
4
4
3
3
4
4
3
3
5
3
Value
Score
1.75
1.73
1.73
1.70
1.62
1.60
1.58
1.55
1.48
1.43
1.42
1.42
1.39
1.36
1.34
1.32
1.29
1.20
1.20
1.05
Finding the Best Car Value Case Study
When trying to decide what car to buy, real value is not necessarily determined by how
much you spend on the initial purchase. Instead, cars that are reliable and don’t cost much
to own often represent the best values. But, no matter how reliable or inexpensive a car may
cost to own, it must also perform well.
To measure value, consumer report developed a statistic referred to as a value score.
The value score is based upon five-year owner costs, overall road-test scores, and predicted
reliability ratings. Five-year owner costs are based on the expenses incurred in the first
five years of ownership, including depreciation, fuel, maintenance and repairs, and so on.
Using a national average of 12,000 miles per year, an average cost per mile driven is used
as the measure of five-year owner costs. Road-test scores are the results of more than 50
tests and evaluations and are based upon a 100-point scale, with higher scores indicating
better performance, comfort, convenience, and fuel economy. The highest road-test score
obtained in the tests conducted by consumer report consumer report was a 99 for a Lexus LS 460L.
Predicted-reliability ratings (15 Poor, 25 Fair, 35 Good, 45 Very Good, and 55
Excellent) are based on data from consumer report Annual Auto Survey.
A car with a value score of 1.0 is considered to be “average value.” A car with a value
score of 2.0 is considered to be twice as good a value as a car with a value score of 1.0; a
car with a value score of 0.5 is considered half as good as average; and so on. The data for
consumer report
The case data is provided in the book.
Managerial Report
1. Develop numerical summaries of the data.
2. Use regression analysis to develop an estimated regression equation that could be
used to predict the value score given the price of the car.
3. Use regression analysis to develop an estimated regression equation that could be
used to predict the value score given the five-year owner costs (cost/mile).
4. Use regression analysis to develop an estimated regression equation that could be
used to predict the value score given the road-test score.
5. Use regression analysis to develop an estimated regression equation that could be
used to predict the value score given the predicted reliability.
6. What conclusions can you derive from your analysis?
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