Probability Distribution Memo

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Probability Distribution Memo
To: Howard Gray, CEO;
Jean Dubois, VP Mechanical Watch Division;
Uma Gardner, VP Production;
Amanda Hamilton, VP Marketing

After identifying the business problem of falling sales and an increase in rejections by the Swiss Official Chronometer Control, conducting a study for research will prove to identify a solution. Researchers performed a study of a sample population of 500 people. The study reveals 60% of the watches purchased are certified and the average rating of the SOCC certification as proof of quality is 3.9 therefore; consumers tend to believe the watches with SOCC certifications are of better quality. The study also reveals of the 39% planning on purchasing another watch within the next six months, 33% are willing to pay between $1,001.00 and $1,500.00 more for an Aquine watch. With that in mind, researchers do not believe advertising has anything to do with declining sales. Further research into the certification process is necessary because the study shows consumers rely on the certification as proof of quality and the rejection rate is increasing.

Reviewing the certification process reveals with a sample size of 120, the test with the highest rejection rates are Horizontal and Vertical Difference, Maximum Variation Rates, and Mean Variation Rates. The data for the three tests is evenly distributed therefore; “applying the Central Limit Theorem, researchers can conclude that the behavior sample represents the behavior of the population” (section 2). As a result of the tests, upgrading the Timing and Poising machines as well as purchasing Customized Movement Holders to aid in securing the base plates of the movement to a flat surface is the suggestion to resolve the business problem.

At this time, the study does not reveal a need for a Deep Water Simulation Unit or an Ultrasonic Cleaning Tank. Neither of these purchases will decrease the rejections by SOCC or increase sales.

Thank you for the...
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