A Hold is interested to model Hoteling Demand of customer and collected the data

Question

A Hold is interested to model Hoteling Demand of customer and collected the data from 250 customers visited during last 2 months. A regression model is applied and following output is generated. Model the estimated regression equation the customer holding demand Test a hypothesis to determine whether pricing significantly decrease the hotel demand of the customers? Given the constructed model, determine whether the model will be considered a fitted one? How would you interpret the estimated coefficient and briefly explain how much variations are explained by the independent variables?

Explanation / Answer

According to the given table we can see that hoteling demand depends on pricing and reputation of the company

i.e. Y= 42.74-8.01a+0.85b

Y denotes the regression equation ;

42.27 is the intercept which denoted the hoteling requirement of the customers irrepective of price and reputation of the hotel. it signifies the minimumrequirement of the customers.

a is a variable which caters to the pricing effects on hoteling needs of the customers. note that it has a negative coeffient which means that it is inversely propotion to the price of the hoteling.

b is a variable which signifies the reputation of the hotel. it has a positive coefficient. it means the better the reputation of the hotel the moe the hoteling needs of the customers.

now we have to find out the estimated regression equation which takes in to account the errors due to uncontrolable factors during measuring.

y= 42.74-8.01a+0.85b ± ;

y= estimated value of Y

represents error or residual error in calculating the values.

error is represented by the residual in the regression analysis.

y= 42.74-8.01a+0.85b ± 8

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