QM 258 - Case Study-SU 16 | Complete Solution

QM 258: Case Study:

Please consider the data presented above for the monthly sales of Ever-cool brand of refrigerators in 1,000s of dollars and answer the following questions:

Independent variables are

Price (in dollars); Promotional Expenditure (in 1,000s of dollars); Quality of service (scale of 1-10); location (categorical variable: city area: 1; suburban area: 0).

a. Based on the relevant residual plots, do you see any evidence of violation of assumptions (Linearity, Normality, Equal variance)?

b. State the multiple regression equation and interpret the meaning of the slopes, b1, b2, b3, and b4.

c. At the 0.05 level of significance, determine whether each independent variable makes a significant contribution to the regression model. On the basis of these results, indicate the independent variables to include in this model. (Based on t - test results)

d. Construct a 95% confidence interval estimate of the population slope between price and the monthly sales () (please note that Minitab can’t do this directly, however you may use the relevant information from Minitab output and then construct the confidence interval manually)

e. Perform the overall F- test and comment on the significance of the model