Bryant/smith Manual Case 7: We Want to Determine the Factors That Affect Selling Prices of Ford Mustangs

Upon your request, I have analyzed the data that was provided to me in assisting you in improving your knowledge of the prices of used Mustangs, so that you are able to provide more accurate sales price for your Mustangs. The following is what the data consisted of and the results of my analysis.

Data

The data consisted of 35 Mustangs with many different items that had to be considered in the analysis such as: if the Mustang is a convertible, the age of the Mustang, miles, type of transmission, air conditioning, number of cylinders in the motor, the color of the Mustang, GT model and if the Mustang was owned by a dealership or a private owner. Plus a hypothetical item was added to the data, Alloy Rims. The data was analyzed and the results are displayed below.

Results

After the data was analyzed, the price of the Mustang was dependent upon if it was a convertible, age of the Mustang and if it was a GT. The price of the Mustang, $8193.89 is in the middle of the price range for the used Mustangs, see Figure 1. Plus it was found what the significant items are: if the Mustang is a convertible, age of the Mustang, and if it is a GT. The first significant item that was analyzed is the convertibles. With a 95% confidence that a 1 year old used Mustang GT Convertible’s price will fall between $15,277.07 and $17,172.66. As an added value, a hypothetical item, Alloy Rims, was added to the data and it was found that they would not be significant to the price due to the significant value in the analysis is .8432.

The Mustang’s price is dependent upon is if it is a convertible and there is strong evidence of this conclusion, see Figure 2. On a scale of the Mustang prices, the middle of all the prices is $7,281.20 and having a convertible, there will be a $3,194.40 increase in the price. So, the price of the Mustang = $7,281.20 + $3,194.40 x convertible (1 if it is a convertible and 0 if it is not). The standard of error between the analyzed price and the actual price should be $3,541.15. Plus, there is a 15% in the total variation of the Mustang price. Having a 95% confidence level, all Mustang Convertible’s price will fall between the price range of $8,197.32 and $12,753.87. There is also a 95% prediction that at least one of the Mustang Convertible’s price will be between $2,919.42 and $18,031.77.

Another item that the Mustang’s price