Americaspony
- 1. America’s Pony Car For Sale…. Marc Kostelansky & Aniello Tambasco
- 2. Background: First Introduced to the public by the Ford Motor Company on April 17, 1964 at the New York World’s Fair.* Created the “ pony car” class of the automotive world –coupes with long hoods and short rear decks.* The Mustang has been in the lives of the American People for the past forty years acting as a pillar of American lore.** It has been Ford’s most famous vehicle since the Model A and the best thing is that its success has made it the companies second model to still be in production.* It was the first car to bring sporty class and style with a price that most can afford.** *http://en.wikipedia.org/wiki/Ford_Mustang **http://www.edmunds.com/ford/mustang/history.html
- 3. Background Cont.: Tom has followed his dream on opening a car lot that sells vintage and classical cars but he knows little about the business world. He has enrolled in a local community college to take a few business classes. Tom is very knowledgeable on the nuts and bolts that makeup the physical features of vintage cars but lacks the skills of the American Business professional. Tom has been eyeing the competitors and local advertisement to promote his business and to maximize profits but his strategy is not working. Tom’s inability to price his car competitively has caused many complaints from customers.
- 4. How can we help Tom drive his business to success
- 5. Data Provided: Tom has provided information on 35 used Mustangs – Which includes: Price Convertible or non-convertible Age Miles Transmission A/C or no A/C 4, 6 or 8 cylinder GT or non-GT model Privately owned or Dealer owned
- 6. Mustang Data Table: AI G PRICE CONVERT AGE MILES TRANS R CYL T OWNER $ 12,688.00 0 1 8,200 1 1 8 1 1 $ 11,650.00 0 1 3,000 1 1 8 1 1 $ 9,500.00 0 3 22,000 1 0 8 0 0 $ 12,500.00 0 2 23,800 1 1 8 1 1 $ 10,488.00 1 4 20,000 1 1 8 1 1 $ 5,988.00 0 4 37,000 1 1 4 0 1 $ 3,590.00 0 5 55,000 1 0 4 0 0 $ 2,800.00 0 6 62,000 1 1 4 0 0 $ 4,900.00 0 7 60,000 1 1 8 1 0 $ 13,500.00 1 3 23,000 1 1 8 1 0 $ 12,000.00 0 3 89,000 1 1 8 1 1 $ 4,388.00 0 4 80,000 1 1 4 0 1 $ 3,000.00 0 7 95,000 1 1 4 0 0 $ 3,900.00 0 8 90,000 1 1 8 1 0 $ 3,350.00 0 8 91,000 1 1 8 1 0 $ 10,500.00 0 3 17,000 1 1 8 1 0 $ 6,500.00 0 3 73,000 1 1 8 0 0 $ 12,900.00 1 2 19,000 1 1 8 0 0 $ 9,000.00 0 2 32,000 1 1 8 0 0
- 7. Mustang Data Cont.: $ 7,000.00 0 6 56,000 1 1 8 1 0 $ 2,500.00 0 6 92,000 1 1 4 0 0 $ 11,500.00 0 1 27,000 0 1 8 0 0 $ 10,995.00 1 2 27,000 0 1 8 0 1 $ 6,200.00 0 3 55,000 0 1 4 0 0 $ 8,700.00 0 3 25,000 0 1 8 0 0 $ 7,288.00 1 5 84,000 0 1 4 0 1 $ 6,995.00 1 7 78,000 0 1 4 0 0 $ 2,488.00 0 7 67,000 0 1 4 0 1 $ 4,200.00 1 8 65,000 0 1 6 0 0 $ 12,990.00 1 1 13,300 0 1 8 0 1 $ 14,500.00 1 3 31,000 0 1 8 1 0 $ 10,900.00 1 3 4,000 0 1 8 0 1 $ 8,500.00 0 3 34,000 0 1 8 0 0 $ 12,988.00 0 1 21,000 0 1 8 1 1 $ 5,900.00 0 4 110,000 0 1 8 0 0 0=Convertible 0=manual 0=No A/C 0=Not GT 0=Dealer Owner 1=Not Convertible 1=auto 1=A/C 1=GT 1=Private Owner
- 8. Data Analysis: Simple Linear Regression § Define the variables § Describe the relationships § Calculate the regression coefficient § How good is the model? § Is the model significant? - General null hypothesis β=0, there is no relationship between x and y
- 9. Regression 1: Price vs. Age n Age = x-variable and Price = y-variable n According to the scatter plot we have a strong negative relationship Correl. Coeff: 82.1% 13. Slope: -1393.24 Intercept: 13,727.02 15. R squared: 0.6739 Std. Error: 2193.01 p-value: 1.55E-09 t-obs: -8.25829 17. There is a strong negative relationship between age and price based on a small p- value and correlation coefficient. Price= 13,727.02-1,393.24(age) Example : A 6 year old mustang should be priced ~$5,367.58
- 10. Regression 2: Price vs. Miles Age = x-variable and Price = y-variable According to the scatter plot we have a weak negative relationship Correl. Coeff: 56.2% Slope: -0.0917 Intercept: 12,621.69 R squared: 0.5620 Std. Error: 2541.61 p-value: 2.19E-07 t-obs: -6.507 There is a weak negative relationship between miles and price based on a small p-value and correlation coefficient. Price=12.621.69-0.0917(miles) Example: A mustang with 50,000 miles should be priced ~ $8,036.69.
- 11. Regression 3: Price vs. Cylinder Price = y-variable and Cylinder = x-variable According to the scatter plot we have a weak positive relationship Correl. Coeff: 65.8% Slope: 1362.63 Intercept: -1072.02 R squared:0.4338 Std. Error: 2890.79 p-value: 1.72E-05 t-obs: 5.02 There is a weak positive relationship between price and cylinder based on a small p-value and correlation coefficient. Price=-1072.02+1362.63(cylinder) Example: A mustang with 8 cylinders should be priced ~ $9,829.02.
- 12. Regression 4: Price vs. GT option Price = y-variable and GT option= x-variable (0=non-GT & 1= GT) According to the scatter plot we have a weak positive relationship Correl. Coeff: 37.2% Slope: 2868.96 Intercept: 7128.27 R squared:0.1382 Std. Error: 3565.15 p-value: 0.0279 t-obs: 2.30 There is a weak positive relationship between price and GT option based on a small p- value and correlation coefficient. Price=7128.27+2868.96(GT option) Example: A mustang with the GT option should be priced ~ $9,997.23
- 13. Regression 5: Price vs. Transmission Price = y-variable and Transmission= x-variable (0=manual & 1= auto) According to the scatter plot we have a slight weak negative relationship Correl. Coeff: 14.7% Slope: -1122.57 Intercept: 8867.43 R squared:0.022 Std. Error: 3798.38 p-value: 0.3978 t-obs: -0.086 There is a slight weak negative relationship between price and transmission based on the correlation coefficient you accept the null. Price=8867.43-1122.57(Transmission) Example: A mustang with an automatic transmission should be priced ~ $7,744.86.
- 14. Overview: Significant Relationships (Correlation coefficient) -Age (82.1%) -Cylinder(65.8%) -Miles (56.2%) _________________________________________ Non Significant Relationships (Correlation coefficient) -GT Option (37.2%) -Transmission (14.7%)
- 15. Recommendations: Tom should focus his pricing for his used mustangs on the regression analysis with the significant correlation coefficients (>50%) which are: age, cylinder and miles. Tom should also compare his prices using a pricing service like Kelley Blue Book (www.kbb.com) or www.edmunds.com. It is highly inaccurate to rely on a gut feeling to price used mustangs. With every purchase of a mustang Tom should give a $50 gas card to show customers he appreciated their business.