A mail-order catalog business maintains a centralized warehouse. Management is c

Question

A mail-order catalog business maintains a centralized warehouse. Management is currently examining the factors that affect warehouse distribution costs. The data provided indicate the warehouse distribution costs (in thousands of dollars), the sales, Upper X 1X1 (in thousands of dollars), and the number of orders received, Upper X 2X2, for each of the past 24 months. Answer parts (a) and (b) below.

costs sales order

Find VIF1 and VIF2, explain how using PHSTAT

71.66 442 3787 85.03 509 5341 63.45 399 4277 72.78 461 4324 68.39 458 4075 52.55 301 3203 70.74 483 4836 82.19 517 5268 74.14 501 4735 70.67 537 4397 54.51 353 2939 63.57 371 4005 72.97 325 4439 58.34 406 3936 79.69 493 4547 94.45 526 5542 59.44 441 3449 90.57 625 5111 93.54 599 5715 69.17 465 4255 53.65 388 3721 89.12 549 5419 66.27 414 4144

Explanation / Answer

> fit=lm(V1~V2+V3,data=z)
> vif(data.frame(z[,2],z[,3]))
Variables VIF
1 sales. 2.709345
2 order. 2.709345

that indictes that all VIF are less than <10 so there is no multicolloniarity between sales and order. the answer done using R software

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