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Chapter 4 Appendix Prolems

1. The manager wants to use shelf space to predict weekly sales of pet food using data from 12 stores. 2. A scatter plot and regression analysis found a direct correlation between shelf space and sales. 3. The slope represents the change in predicted sales for each additional foot of shelf space. 4. The question asks to predict sales for an 8 foot shelf and provide a 95% confidence interval.

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Ray Davis
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55 views

Chapter 4 Appendix Prolems

1. The manager wants to use shelf space to predict weekly sales of pet food using data from 12 stores. 2. A scatter plot and regression analysis found a direct correlation between shelf space and sales. 3. The slope represents the change in predicted sales for each additional foot of shelf space. 4. The question asks to predict sales for an 8 foot shelf and provide a 95% confidence interval.

Uploaded by

Ray Davis
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as PDF, TXT or read online on Scribd
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Problem 1

Shelf Space Sales Aisle Location


5 160 0
5 220 1
5 140 0
10 190 0
10 240 0
10 260 1
15 230 0
15 270 0
15 280 1
20 260 0
20 290 0
20 310 1

The manager of a large supermarket chain would like


to use shelf space to predict the sales of pet food. A
random sample of 12 equal-sized stores is selected
with the results listed above.

a. Construct a scatter plot and then run a regression


on that data if it appears that there is a direct
correlation.

b. Interpret the meaning of the slope in this


problem.

c. Predict the mean weekly sales of pet food for


stores with 8 feet of shelf space for pet food. What
would be the total value with a 95% confidence
level?

d. At the .05 level of significance, is there evidence


of a linear relationship between shelf space and
sales?

e. Construct a 95% confidence interval estimate of


the population slope

Page 1
Assessed Value Size (000 Sq Ft.) Age (years)
184.4 2.00 3.42
177.4 1.71 11.50
175.7 1.45 8.33
185.9 1.76 0.00
179.1 1.93 7.42
170.4 1.20 32.00
175.8 1.55 16.00
185.9 1.93 2.00
178.5 1.59 1.75
179.2 1.50 2.75
186.7 1.90 0.00
179.3 1.39 0.00
174.5 1.54 12.58
183.8 1.89 2.75
176.8 1.59 7.17

Develop a model to predict the assessed value (in thousands of dollars), using
the size of the houses (in thousands of square feet) and the age of the houses
(in years) from the data above.

a. State the multiple regression equation

b. Interpret the meaning of the slopes in this equation

c. Predict the mean assessed value for a house that is 1,750 square feet and is
10 years old.

d. Determine whether there is a significant relationship between assessed


value and the two independent variables at the 0.05 significance level (this is
the F test)

e. At the 0.05 level of significance, determine whether each independent


variable makes a significant contribution to the regression model.

f. The real estate assessor's office has been publicly quoted as saying that the
age of a house has no bearing on its assessed valued. Based on your answers
above, do you agree with this statement? Explain.

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