A large car dealership with 20 locations nationwide is interested in implementin

Question

A large car dealership with 20 locations nationwide is interested in implementing a training program to increase the sales of its workers. A human resources consulting firm offers a variety of training programs which vary in technique and duration. After evaluating all proposals, the owners have narrowed it down to three possible training programs but disagree on which one would be more effective. Consider you want to help in making an informed decision and propose a way to statistically test the effectiveness of the three training programs by collecting data from three different dealer locations: Houston, San Antonio and Dallas. Write one or two short paragraphs explaining the owners how you would do this. In your answer make sure to include the following.

A. Make a list of at least three variables that would be useful to predict the sales of a restaurant location.

B. Choose one of the variables above to write a linear regression equation to estimate the sales of these locations.

C. Clearly define your dependent and independent variables and how to measure them. (For example, in the car dealership exercise above you could measure sales in dollars or numbers of cars. Here I want you to be as clear as possible.)

D.What is the expected sign of the slope coefficient and why do you expect that sign?

E. How will you use the coefficient of determination to evaluate the estimated model?

F.Give a hypothetical numerical example to show how the linear equation would be used to estimate the sales.

Explanation / Answer

A) Number of skilled service people, Proper ambience and attractive price.

B) Sales=b1-b0*Price

C) Dependent variable is Sales (in dollars) and independnet variable is price (in dollars).

D) The expected sign of slope coefficient is negative, with decrease in each unit of price, the sale is supposed to increase by b0.

E) Coefficient of determination will explain around how much variation in price is accounted for variation in sales.

F) Sales=7123.4-1.213*Price

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