Data on advertising expenditures and revenue ( in thousands of dollars) for the

ID: 3048024 • Letter: D

Question

Data on advertising expenditures and revenue ( in thousands of dollars) for the four seasons restaurant follow?

1. Use minitab to help you answer the following questions.

a. Develop an estimated regression equation to predict for revenue using advertising expenditures.

b. Test whether revenue and advertising expenditures are related at a 0.05 level of significance. Make sure to show all your steps.

c. Prepare a residual plot of y-yhat^ versus yhat^ and a normal probability plot.

d. What conclusions can you draw from residual analysis? Should this model be used, or should we look for a better one?

advertising expenditures revenue 1 19 2 32 4 44 6 40 10 52 14 53 20 54

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Regression Analysis: revenue versus advertising expenditures

The regression equation is
revenue = 29.4 + 1.55 advertising expenditures

Predictor Coef SECoef T P
Constant 29.399 4.807 6.12 0.002
advertising expenditures 1.5475 0.4635 3.34 0.021

S = 7.87753 R-Sq = 69.0% R-Sq(adj) = 62.8%

Analysis of Variance

Source DF SS MS F P
Regression 1 691.72 691.72 11.15 0.021
Residual Error 5 310.28 62.06
Total 6 1002.00

Analysis of Variance

Source DF SS MS F P
Regression 1 691.72 691.72 11.15 0.021
Residual Error 5 310.28 62.06
Total 6 1002.00

alpha = 0.05

p value = 0.021

p value < alpha

revenue and advertising expenditures are related at a 0.05 level of significance.

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