Sam's Sandwich Shack recently conducted two focus groups, each ...

[nenivikky]

Sam's Sandwich Shack recently conducted two focus groups, each with 6 customers and a moderator. Sam believes he gathered enough feedback from these focus groups to revamp his menu and to initiate some changes to the level of service provided by his staff. What would you recommend to Sam?
 a. Predicting how the marketplace will respond based on focus groups is not a great idea.
  b. Focus groups are a great predictor of how the marketplace will respond.
  c. He should conduct more customer focus groups, and then base his decisions on the focus group discussions.
  d. Focus groups are a waste of time, and provide little value.

Question 2

Explain what an acceptable R2 value is.

[rachel]

Answer to Question 1

a

Answer to Question 2

This question is asked frequently. However, guidelines for R2 values are neither simple nor straightforward. Indeed, good and bad values for the coefficient of determination depend on so many factors that a single precise guideline is considered inappropriate. The focus should be on the F-test. In practice, do not expect to often see a simple regression result with an R2 anywhere near 0.875 . They will normally be considerably lower.