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The sales for Westside, a chain of upscale clothing stores for women have
increased during the past 12 years as the chain has expanded the number of
stores. Until now, Westside managers selected sites based on subjective
factors, such as the availability of a good lease or the perception that a
location seemed ideal for an apparel store. As the new director of planning,
you need to develop a systematic approach that will lead to making better
decisions during the site selection process. As a starting point, you believe
that the size of the store significantly contributes to store sales, & you want
to use this relationship in the decision making process. How can you use
statistics so that you can forecast the annual sales of a proposed store
based on the size of that store? To examine the relationship between the
store size in square feet & its annual sales, data were collected from a
sample of 14 stores & given in the following table:
Store
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Square Feet
(Thousands)
1.7
1.6
2.8
5.6
1.3
2.2
1.3
1.1
3.2
1.5
5.2
4.6
5.8
3.0
Regression was run on MS Excel and the partial result below was extracted
from the Excel result..
SUMMARY OUTPUT
Regression
Statistics
Multiple R
R Square
Adjusted R
0.9509
0.9042
0.8962
2
Square
Standard Error 0.9664
.
Observations 14
ANOVA
Regression
Residual
Total
Intercept
Square Feet
df
1
12
13
SS
105.7476
11.2067
116.9543
Coefficients
Standard
Error
T
Stat
0.9645
1.6699
0.5262
0.1569
1.8329 -0.1820
10.6411 1.3280
Lower
95%
Upper
95%
2.1110
2.0118
By using the results above & =0.05, develop a regression model to predict
sales that are estimated to vary according to the size of the store by
performing the following steps.
a. State the linear relationship between sales & store size by formulating
linear regression model & interpret the coefficients.
b. Obtain the coefficient of determination & interpret it.
c. Obtain the standard error of estimate & interpret it.
d. Comment on the t test for the slope of the regression line using
confidence interval
e. Predict sales when store size is 8000 square feet.
3+2+2+2+1=10 Marks
Question 4
For the past several years, business conditions for rainbow enterprises have
been rather black. The CEO has collected quarterly totals of the number of
employees who have been laid off over the past 4 years.
Time
Period
2009-I
2009-II 2009-III
2009-IV
2010-I
2010-II 2010-III
2010-IV
Layoffs 25
27
32
29
28
32
34
Time
2011-I
Period
Layoffs 35
2011-II
2011-III
2011-IV
2012-I
2012-II 2012-III
2012-IV
37
37
39
38
42
45
44
38