Business Statistics

A major financial services company wishes to better understand its mortgage approval process. In particular,
the company is interested in learning about the effects of good versus fair credit history, the size of the
mortgage (less than $500,000 versus greater than $500,000), and the region of the United States (western
versus eastern) on the time it takes to get a mortgage approved. The database of mortgages approved in the
last year is accessed, and a random sample of five approved mortgages is chosen for each of the eight
combinations of the three variables. The data are shown in the table.
First, conduct an analysis using the following steps:
Use the data shown in the table to conduct a design of experiment (DOE) in Microsoft Excel to determine the
nature and magnitude of the effects of the three variables on mortgage approval times. Identify the key drivers
of this process.
Determine the graphical display tool (Interaction Effects Chart, Scatter Chart, et cetera) that you would use to
present the results of the DOE you conducted in Question 1. Provide a rationale for your response.
Assess the data sampling method:
Determine if the sample size is sufficient.
Identify circumstances under which would it have been appropriate to select a larger sample. Determine
whether a sample of five mortgages is adequate to access the relative magnitudes of the effects of the
variables.
Recommend a sample size for future study and discuss what analysis can be made with a larger sample size.
(Hint: Look back at Chapters 2, 3, 5, and 6 for discussion of sampling.)