Observations are taken on sales of a certain mountain bike in 30 sporting goods
ID: 3375007 • Letter: O
Question
Observations are taken on sales of a certain mountain bike in 30 sporting goods stores. The regression model was Y = total sales (thousands of dollars), Xi = display floor space (square meters), X2 = competitors' advertising expenditures (thousands of dollars), X3advertised price (dollars per unit) Predictor Intercept FloorSpace CompetingAds Price Coefficient 1225.44 11.52 -6.935 -0.1496 cel Data File (a) Write the fitted regression equation. (Round your coefficient CompetingAds to 3 decimal places coefficient Price to 4 decimal places, and other values to 2 decimal places. Negative values should be indicated by a minus sign.) 0.1496+ 11.52 FloorSpace+ -6.935 *CompetingAds1225.44 rice (b-1) The coefficient of FloorSpace says that each additional square foot of floor space O adds about 11.52 to sales (in thousands of dollars) O takes away 11.52 from sales (in thousands of dollars) O adds about 6.935 to sales (in thousands of dollars) O takes away 0.1496 from sales (in thousands of dollars) (b-2) The coefficient of CompetingAds says that each additional $1,000 of "competitors advertising expenditures O reduces sales by about 6.935 from sales (in thousands of dollars) O takes away 11.52 from sales (in thousands of dollars) O adds about 6.935 to sales (in thousands of dollars) O takes away 0.1496 from sales (in thousands of dollars) (b-3) The coefficient of Price says that each additional $1 of advertised price O reduces sales by about 0.1496 from sales (in thousands of dollars) O reduces sales by about 6.935 from sales (in thousands of dollars) O takes away 11.52 from sales (in thousands of dollars) O adds about 6.935 to sales (in thousands of dollars) (c) The intercept is not meaningful, since a mountain bike cannot sell for zero, which will happen if all the ariables are zerd rue O False (d) Make a prediction for Sales when FloorSpace80, CompetingAds100, and Price 1,200. (Enten your answer in thousands. Round your answer to 2 decimal places.) Sales thousandExplanation / Answer
Solution: (a) Write the fitted regression equation.
Answer: 1225.44 + 11.52 * FloorSpace + (-6.935) * CompetingAds + (-0.1496) * Price
(b-1) The coefficient of FloorSpace says that each additional square foot of floor space
Answer: Adds about 11.52 to sales (in thousands of dollars)
(b-2) The coefficient of CompetingAds says that each additional $1,000 of "competitors" advertising expenditures"
Answer: Reduces sales by about 6.935 from sales (in thousands of dollars)
(b-3) The coefficient of Price says that each additional $1 of advertised price
Answer: Reduces sales by about 0.1496 from sales (in thousands of dollars)
(c) The intercept is not meaningful, since a mountain bike cannot sell for zero, which will happen if all the variables are zero.
Answer: True
(d) Make a prediction for Sales when FloorSpace=80, CompetingAds = 100. and Price = 1200
Answer: Sales $ = 1225.44 + 11.52 * 80 - 6.935 * 100 -0.1496 * 1200
Sales $ = 1274.02
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