Super Markets Inc. is considering expanding into the Scottsdale, Arizona, area.

Question

Super Markets Inc. is considering expanding into the Scottsdale, Arizona, area. You as director of planning must present an analysis of the proposed expansion to the operating committee of the board of directors. As a part of your proposal, you need to include information on the amount people in the region spend per month for grocery items. You would also like to include information on the relationship between the amount spent for grocery items and income. Assume amount spent is the dependent variable and monthly income is the independent variable.

Household Amount Income 1 $278 $5,068 2 $393 $5,596 3 $512 $3,780 4 $551 $5,247 5 $691 $4,377 6 $686 $4,230 7 $831 $4,257 8 $735 $5,326 9 $632 $5,132 10 $616 $5,996 11 $571 $4,749 12 $629 $4,841 13 $556 $4,918 14 $748 $5,564 15 $600 $6,033 16 $557 $4,993 17 $678 $5,102 18 $636 $5,653 19 $678 $5,911 20 $687 $6,550 21 $1,075 $5,683 22 $922 $7,380 23 $648 $7,285 24 $1,067 $7,651 25 $832 $7,599 26 $892 $6,768 27 $934 $8,895 28 $1,066 $8,004 29 $1,258 $7,893 30 $997 $7,696 31 $983 $8,904 32 $1,265 $8,345 33 $1,109 $9,423 34 $887 $9,555 35 $1,081 $8,901 36 $1,226 $9,747 37 $1,155 $9,942 38 $1,374 $9,977 39 $1,511 $9,056 40 $1,148 $9,740

Explanation / Answer

By using MINITAB, find out the ralationship between amount spent and monthly income.

follow the procedure for MINIAB output

Choose Stat > Regression > Regression.

In Response, enter Amount.

In Predictors, enter Income.

Click OK.

Session window output

MTB > Regress 'Amount' 1 'Income';
SUBC>   Constant;
SUBC>   Brief 1.

Regression Analysis: Amount versus Income

The regression equation is Amount = 32 + 0.119 Income

Predictor     Coef     SE Coef     T      P
Constant      31.8    102.0 0.31 0.757
Income     0.11930   0.01447 8.25 0.000

S = 172.193   R-Sq = 64.1%   R-Sq(adj) = 63.2%

And correlation between amount spent and monthly income = 0.80

There is a positive relation among them. That means if monthly income is decrease then amount of spent is also decreases and vice versa.

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