Eynesbury: Quantitative Methods for Business 2010(3)
Assignment 2: Due 21st January at 5:00pm
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Eynesbury: Quantitative Methods for Business 2010(3)
Assignment 2
Page 2 of 8
Case study – Fine Line Productions
Fine Line Productions is a private film finance and production company committed to supporting
talented film makers and bringing their vision to the screen.
Fine Line Productions is considering a new movie, tentatively titled Phantom Invasion. Based on
the script, the movie could be described as a science fiction action thriller with elements of black
comedy.
The budget has been tentatively set for $150 million and the company would be aiming for at
least half of that amount to be earned at the box office during the opening weekend at the#p#分頁標題#e#
cinemas.
The company executives believe that Phantom Invasion could be their next box office hit, but are
somewhat concerned that in its current form, the script is trying to cover too many angles. Does a
winning ‘formula’ need to derive from four different movie genres?
Discussions so far have been focused on the most recent box office successes, most notably the
2009 epic Avatar, a commercially and critically successful science fiction film that earned a 2010
Best Picture Oscar nomination. If profitable, Phantom Invasion would likely be made into a
sequel. Again, 2009 brought a number of successful sequels, including a follow up to 2007
Transformers, an action film based on the Transformers toy line.
You have been approached to perform a movie industry analysis in order to identify the most
profitable genre and target audience for Phantom Invasion, and to predict its box office revenue.
Perform the necessary quantitative analyses and prepare a memorandum for Fine
Line Productions, where you describe your findings and make appropriate
recommendations. Specifically, answer the questions that follow on pages 3 to 6.
Assignment component Mark
Memorandum 40
Appendices 50
Presentation 10
TOTAL 100
Eynesbury: Quantitative Methods for Business 2010(3)
Assignment 2
Page 3 of 8
Section 1: This section details the questions you should answer within the main
body of your memorandum.
To answer these questions you will need to first perform the analysis required for section
2 of this assignment.
Question 1 – How do different movie genres perform at box office?
How do the four movie genres compare? Which genre seems to do the best at the box office?
Which does the worst? Which genre shows the most variability in its box office results? Which
shows the least? If Phantom Invasion is to be a box office hit for Fine Line Productions, which
genre(s) are best suited for that purpose? Use the results from this question to make an
appropriate recommendation.
Question 2 – How does a sequel compare to the original?
You will need to compare and contrast weekend per theatre receipts for the two movies providing
an appropriate conclusion.
Questions 3 – What predicts total box office takings for a movie?
Recommend and describe the most useful regression model for predicting total box office takings,
and discuss your prediction for Phantom Invasion.
Question 4 – Do gender and age influence movie preferences?
Comment on any significant features of the two stacked column charts. Use your probability
calculation results to make some recommendations on how Phantom Invasion may be marketed
and who its target audience is most likely to be.
Eynesbury: Quantitative Methods for Business 2010(3)
Assignment 2
Page 4 of 8#p#分頁標題#e#
Section 2: This section details the questions you should provide calculations and
results in the appendices of your memorandum.
Question 1 – How do different movie genres perform at box office?
Summary measures below are based on total box office takings, adjusted for ticket price inflation,
for top 25 biggest grossing movies 1977-2010 in each movie genre category:
Summary Movie Genre
measure Science Fiction Action Black Comedy Thriller
Average $ 497,768,775 $ 395,000,164 $ 29,862,967 $ 265,664,195
Std. dev. $ 238,314,536 $ 113,439,411 $ 19,854,281 $ 175,964,950
Min $ 267,922,763 $ 293,349,555 $ 9,947,625 $ 137,917,433
Max $ 1,221,103,103 $ 738,932,505 $ 92,308,740 $ 966,233,033
Table 1: Summary measures of box office takings by genre. Source: www.the-numbers.com
(a) Examine these descriptive statistics. Why aren’t direct comparisons appropriate? Calculate
and interpret the measure(s) that would allow you to make direct comparisons.
(b) What are the potential shortcomings of the analysis from part (a)? Explain briefly.
Question 2 – How does a sequel compare to the original?
For this question you will analyse box office receipt data for two movies: Transformers, released
in 2007, and its sequel Transformers: Revenge of the Fallen, released in 2009 to be found in the
file ‘movie_data’, listed on the portal.
(a) Make a histogram and obtain Descriptive Statistics, including Quartile 1 and Quartile 3, for
weekend per theatre box office receipts for each of the movies. Include printouts of your data,
histograms and Descriptive Statistics in your Appendix.
(b) Describe the shape (symmetry, modality and outliers) of each distribution.
(c) Nominate appropriate summary measures of centrality and dispersion for the distribution of
Transformers weekend per theatre receipts, and for the distribution of Transformers: Revenge of
the Fallen weekend per theatre receipts. Give reason(s) for your choice. For each distribution,
give and interpret the values of the summary measures you have chosen.
Questions 3 – What predicts total box office takings for a movie?
In this question you will be working with data relating to 50 biggest grossing movies for 2009,
stored in the file Movie data.xls. This file can be downloaded from the Assignments page on the
course website. The data was extracted from to http://www.the-numbers.com/.
(a) Can opening weekend box office takings predict the total amount a movie will earn from
ticket sales?
Eynesbury: Quantitative Methods for Business 2010(3)
Assignment 2
Page 5 of 8
(b) Use Excel to add a trendline and display its equation and R-squared value. Interpret the value
of the intercept, slope and the coefficient of determination.
(c) Are there any unusual observations that may have influenced the results? If so, identify these#p#分頁標題#e#
observations (i.e. identify the movie(s)).
(d) Can the budget predict the total amount a movie will earn from ticket sales? Use Excel to
chart Estimated budget (millions) vs 2009 Gross (millions). Based on your diagram, is it
appropriate to fit a regression line in this case? Comment briefly.
(e) Interpret the value of the intercept, slope and the coefficient of determination.
(f) Are there any unusual observations that may have influenced the results? If so, identify these
observations (i.e. identify the movie(s)).
(g) Which regression equation is more appropriate for making predictions, the one from (b) or the
one from part (e)? Explain briefly. Use that equation to predict total box office takings for
Phantom Invasion based on the opening weekend and estimated budget pro jections provided by
Fine Line Productions. Comment on the accuracy of that prediction.
Question 4 – Do gender and age influence movie preferences?
Data for this question has been adapted from the following paper:
Fischoff, S, Antonio, J & Lewis BA (1998). Favorite Films and Film Genres As A Function of
Race, Age, and Gender. Journal of Media Psychology , vol. 3 (1).
Movie genre preferences by genre of 560 randomly selected survey respondents have been
summarized in the following contingency table:
Favourite Genre Male Female Total
Action 61 45 106
Drama 91 111 202
Comedy 32 37 69
Romance 28 53 81
Sci-Fi 32 16 48
Fantasy 20 34 54
Total 264 296 560
Table 2: Movie genre preferences by gender.
Results of the same survey have also been classified according to the respondents’ age, producing
the following contingency table:
Favourite Genre Gen Y (13-25) Gen X (26-49) Baby Boomers (50+) Total
Action 54 38 14 106
Drama 63 89 50 202
Comedy 26 33 10 69
Romance 35 32 14 81
Sci-Fi 18 22 8 48
Fantasy 24 20 10 54
Total 220 234 106 560
Table 3: Movie genre preferences by age.
Eynesbury: Quantitative Methods for Business 2010(3)
Assignment 2
Page 6 of 8
(a) Use Excel to obtain a 100% stacked column chart for the data from each table.
(b) From Table 2, what is the probability that a respondent chose Sci-Fi as their favourite movie
genre?
(c) From Table 2, What is the probability that a respondent chose Sci-Fi as their favourite movie
genre, if:
(i) He or she was Gen Y?
(ii) He or she was Gen X?
(iii) He or she was a Baby Boomer?
(d) Repeat calculations from (b) and (c) for Action instead of Sci-Fi.
(e) From Table 3, What is the probability that a respondent chose Sci-Fi as their favourite movie
genre, if:
(i) They were male?
(ii) They were female?
(f) Repeat calculations from (e) for Action instead of Sci-Fi.
Eynesbury: Quantitative Methods for Business 2010(3)
Assignment 2#p#分頁標題#e#
Page 7 of 8
Hints and other instructions
Question 1 – How do different movie genres perform at box office?
None
Question 2 – How does a sequel compare to the original?
EXCEL Instructions:
Add your ID to the column names for weekend per theatre receipts (e.g. Transformers should
become Transformers 599999).
Create another column called Bin with numbers from 1000 to 10000 in steps of 1000 (i.e. 1000,
2000, 3000 and so on up to 10000). Refer to Topic 6 in the Excel Booklet for instructions on how
to obtain and format a histogram. Make sure that the title of your histogram ends with your
network ID (e.g. Transformers weekend per theatre receipts bloggsj001). Refer to Topic 7 in the
Excel Booklet for instructions on how to obtain Descriptive Statistics and the two quartiles.
Instructions for identifying outliers:
Whether an observation is an outlier is a matter of judgement. One rule commonly used for
identifying outliers is the so-called 1.5 × IQR rule . An observation is suspected to be an outlier if
it is more than 1.5 × IQR below the first quartile Q1 or above the third quartile Q3.
Apply this rule to Transformers weekend per theatre receipts and Transformers: Revenge of the
Fallen weekend per theatre receipts. Identify suspected outliers (if any) by their date and amount.
For your analysis of each movie, you will only need the Date and Per Theatre box office receipts;
you may delete the remaining columns.
Questions 3 – What predicts total box office takings for a movie?
EXCEL Instructions:
For part (a) refer to Topic 9 in the Excel Booklet for instructions on how to obtain a scatterplot.
Make sure that the title of your scatter diagram ends with your network ID (e.g. Total 2009 Box
Office Takings vs Opening Weekend Gross 599999).
For part (b) refer to Topic 9 in the Excel Booklet for instructions on how to add a trendline and
display its equation and R-squared.
For part (e) Use Excel to add a trendline and use the options box to display its equation and Rsquared
value.
Question 4 – Do gender and age influence movie preferences?
EXCEL Instructions:
For part (a) refer to Topic 6 in the Excel Booklet for instructions on how to obtain 100% stacked
column chart. Please make sure that the title of your chart ends with your network ID (e.g. Movie
Genre preferences vs gender bloggsj001).
General
Do not repeat the detailed questions in your memorandum. Only provide e.g. “Question
1” as a section header for both the body of your memo. Head each appendix as per the
question being answered. Do not include the data supplied, only results of calculations.
Eynesbury: Quantitative Methods for Business 2010(3)
Assignment 2
Page 8 of 8
Formatting the Memorandum (memo)
The Business memo should consist of no more than 1,000 words plus appropriate#p#分頁標題#e#
calculations, charts, Excel output, etc. Important information:
1. We will not count the word total – this figure is a guideline only and no deductions
will be applied for going over or under 1,000 words.
2. No referencing is required, unless you specifically cite a textual source. All
formulae from the textbook do not require referencing.
3. You do not need to write an introduction or conclusion for the memo.
The memorandum must be comprised of the following sections:
1. Body of Memo (Analysis): Present only the information requested. Do not show
your working out in this section, just the results of your working out. You can present
your analysis in any combination of written paragraphs and/or using bullet points,
tables, figures, etc. Ensure your analysis is well justified to demonstrate your
understanding. All figures and tables in this section must have an accompanying
caption and must be referred to in text.
It is important in this section to interpret the results of your calculations Do NOT just
repeat what the results are. Tell the reader what they mean. Interpretation is
extremely important and is the area you will earn the most marks.
2. Appendix: organise all output in question order. Place all output/calculations here as
requested in the green boxes.
10 Marks allocated for presentation.
Deduction of Marks Marks will be lost at a rate of 2 marks for each instance of:
1. An answer in the Analysis section that is not in the same order as the questions.
2. Working out/calculations included in the Analysis section (all working out must
appear in the Appendix only and only the final results of the working out can appear
in the Analysis).
3. Figures and/or tables included in the Analysis section without a meaningful caption.
4. Figures without labelled axes, title and a meaningful legend.
5. Figures/Tables shown in the Analysis section but not referred to in the Analysis text
itself.
6. Requested Appendix output appearing in the Analysis and vice versa.