SUMMARY OUTPUT Regression Statistics Multiple R 0.86 R Square 0.75 Adjusted R Sq
ID: 3048680 • Letter: S
Question
SUMMARY OUTPUT
Regression Statistics
Multiple R
0.86
R Square
0.75
Adjusted R Square
0.70
Standard Error
171.55
Observations
7
ANOVA
df
SS
MS
F
Significance F
Regression
1
435,336.22
435,336.22
14.79
0.0120
Residual
5
147,149.49
29,429.90
Total
6
582,485.71
Standard
Lower
Upper
Coefficients
Error
t Stat
P-value
95%
95%
Intercept
709.81
1,150.73
0.62
0.56
-2,248.24
3,667.85
X Variable 1
0.29
0.07
3.85
0.01
0.09
0.48
KimKim
WooWoo,
owner of
Flower PetalFlower Petal,
operates a local chain of floral shops. Each shop has its own delivery van. Instead of charging a flat delivery fee,
WooWoo
wants to set the delivery fee based on the distance driven to deliver the flowers.
WooWoo
wants to separate the fixed and variable portions of
herher
van operating costs so that
sheshe
has a better idea how delivery distance affects these costs.
Kim'sKim's
Flower PetalFlower Petal
does a regression analysis on the next year's data using Excel. The output generated by Excel is as follows:
LOADING...
(Click the icon to view the regression analysis.)
Requirements
1.
Determine the firm's cost equation (use the output from the Excel regression).
2.
Flower PetalFlower Petal's
3.
17 comma 00017,000
miles.
SUMMARY OUTPUT
Regression Statistics
Multiple R
0.86
R Square
0.75
Adjusted R Square
0.70
Standard Error
171.55
Observations
7
Explanation / Answer
1) Regression equation using Cost eqaution:
Cost'= 709.81+ 0.29*Miles
2) R-sqaured value: Coefficient of determination or Estimated probability variance by regression equation:
R-squared value: 0.75
3) Cost'= 709.81+ 0.29*Miles
miles= 17000
Cost'= 709.81 + 0.29* 17000 = 709.81+ 4930= 5639.31
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