It seems logical that restaurant chains with more units (restaurants) would have

Question

It seems logical that restaurant chains with more units (restaurants) would have greater sales. This assumption is mitigated, however, by several possibilities: some units may be more profitable than others, some units may be larger, some units may serve more meals, some units may serve more expensive meals, and so on. The data shown here were published by OSR 50. Perform a simple regression analysis to predict a food chain’s sales by its number of units. How strong is the relationship? Chain Sales ($ billions) Number of Units (1000) McDonalds 35.45 14.4 Starbucks 12.69 12.1 Subway 11.90 27.2 Burger King 8.64 7.1 Wendy’s 8.51 5.8 Taco Bell 8.20 5.9 Dunkin’ Donuts 7.18 8.1 Chick-Fil-A 5.78 1.9 Pizza Hut 5.50 7.9 Panera Bread 4.50 1.9 KFC 4.20 4.4 Domino’s Pizza 4.10 5.1 SONIC Drive-Ins 4.09 3.5 Chipotle Mexican Grill 4.05 1.8 Carl’s Jr./Hardee’s 3.57 2.9 (Do not round the intermediate values. Round your answer to 3 decimal places.) r2 =

Explanation / Answer

The statistical software output for correlation coeffcient is:

Correlation between Sales ($ Billion) and Number of Units (1000) is:
0.53967393

Hence,

r = 0.540

So,

r2 = 0.5402 = 0.291

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