A chain of small convenience food stores performs a regression analysis to explain variation in sales volume among 16 stores. The variables in the study are as follows: Sales: Average daily sales volume of a store in thousands of dollars Size: Floor space in thousands of square feet Parking: Number of free parking spaces adjacent to the store Income: Estimated per household income of the zip code area of the store Output from a regression program is shown below:
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The variables considered are Sales (dependent variable), and Size, Parking, and Income (independent variables). Show moreā¦
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Management proposed the following regression model to predict sales at a fast-food outlet: y = Ī²0 + Ī²1x1 + Ī²2x2 + Ī²3x3 + Īµ where: y = sales (in $1000s) Ī²0 = intercept Ī²1 = coefficient for the number of competitors within one mile (x1) Ī²2 = coefficient for the population within one mile (x2) Ī²3 = coefficient for the presence of a drive-up window (x3) Īµ = error term The following estimated regression equation was developed after 20 outlets were surveyed: y = 9 + 10.8x1 + 6.832x2 + 15.523x3 What is the expected amount of sales attributable to the drive-up window? Predict sales for a store with two competitors, a population of 8,000 within one mile, and no drive-up window. Estimate of sales Predict sales for a store with one competitor, a population of 4,000 within one mile, and a drive-up window. Estimate of sales
Madhur L.
Management proposed the following regression model to predict sales at a fast-food outlet: Y = Bo + B1x1 + B2x2 + B3x3 where Y = sales ($1,000s) x1 = number of competitors within one mile x2 = population within one mile (1,000s) x3 = 1 if drive-up window present, 0 otherwise The following estimated regression equation was developed after 20 outlets were surveyed: Y = 10.9 + 4.2x1 + 6.8x2 + 15.9x3 (a) What is the expected amount of sales (in dollars) attributable to the drive-up window? (b) Predict sales (in dollars) for a store with four competitors within one mile, a population of 8,000 within one mile, and no drive-up window. (c) Predict sales (in dollars) for a store with one competitor within one mile, a population of 3,000 within one mile, and a drive-up window.
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