A large department store has collected the following monthly data on lost sales

Question

A large department store has collected the following monthly data on lost sales revenue due to theft and the number of security guard hours on duty:

Lost Sales Revenue Total Security Lost Sales Revenue Total Security

($000) Guard hours ($000) Guard hours

1.0 600 1.8 950

1.4 630 2.1 1300

1.9 1000 2.3 1350

2.0 1200   

(a) Determine the least squares regression equation.

(b) Using the results of part (a), find the estimated lost sales revenues if the total number of security guard hours is 800.

(c) Calculate the coefficient of correlation.

(d) Calculate the coefficient of determination.

Explanation / Answer

(a) Determine the least squares regression equation.

least squares equation: Y = .0014X +.3780

least squares equation: Y = .0014X + .955-----------ANSWER

least squares equation: Y = .0014 X + .9121

least squares equation: Y = .3780X+ .0014

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