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Special Problem 4C Coffee and Doughnuts

In this Special Problem yorn task is to investigate the impressive growth of Starbucks Coffee andKrispyKreme Doughnuts companies, as measured by the nunnber of stores opened. The table belowshows the number of new KrispyKreme stores opened each year from 1985 through 2000. Refer to thecompany's Web site, www.krispykreme.com, for more information.

Year

NO. OI

Etoresopened

1985198 6L9871988198 9x9901991L9921993L99419951995L9971998L9992 000

1211114327

10L77

152335

You will need to extend this table to include the total number of stores that were operating each year.The total number of stores open for selected years for the Starbucks Company can be found at theirWeb site, http://vrrrrr.starbucks.com/aboufus/timeline.asp. There will be some gaps in theStarbucks data but the data available will be sufficient for our pu{poses. Your assignment is toconstuct a model for the growth of each company using what you have learned in Chapter 4. Thefollowing tasks should be addressed for both companies:

1. Plot the total number of stores by year for each company. Describe the growth that each companyhas experienced. Support your contention.

2, Show the equation that you obtain to model the growth in each case. If necessary, tansform thedata but at some stage you should have data, or reexpressed data, that describe alinear hend.

3. Once you have data that show a linear pattem, perform least-squares regression to obtain theequation of a straight line.

Chapter 4 Special Problem 4C

4. Report the correlation and the l-value. Interpret these numerical results.5. Make a residual plot. Interpret the residual plot.

6. If you transforrred your data to produce a linear pattem, then back-tansform to find the equationfor your final growth model. In all of these preceding steps, show enough detail so that the reader canfollowyour analysis.

In general, construct the appropriate graphs to visually show the sequence of steps. The numericalanalysis and the graphical analysis should go hand-in-hand.

7, Use your final model to predict the nunrber of stores that will be opened next year; two years fromnow; five years from now. How far into the future af,e you willing to make a prediction, using yourmodel?

8. What are some of the limitations of the data? What do the data not tell you? What are somehidden facts the numbers may not show?

The Report Describe your investigation in a report. Your paper should be, not a list of answers, butrather a free-flowing, sequential, logical description of the steps you took and the results you got frombeginningtoend. Tellthestory,fromthe introduction tothe analysistothe conclusions, withallofthe necessary supponing calculator screen shots or computer plots and numerical summaries. Inparticular, write you report so that the reader can follow yorn reasoning as you proceed t}rough yourinvestigation. Follow the conventions as described in the general guidelines for writing up SpecialProblems. You will be graded on both the accuracy of your work and the quality of your writtencommrurication. See your teacher if you have questions.

Deadline. This Special Problem will be due no later than

Chapter 4 Special Problem 4C