Problem 1

Shelf Space Sales Aisle Location

5 160 0
5 220 1
5 140 0
10 190 0
10 240 0
10 260 1
15 230 0
15 270 0
15 280 1
20 260 0
20 290 0
20 310 1

The manager of a large supermarket chain would like

to use shelf space to predict the sales of pet food. A
random sample of 12 equal-sized stores is selected
with the results listed above.

a. Construct a scatter plot and then run a regression

on that data if it appears that there is a direct
correlation.

b. Interpret the meaning of the slope in this

problem.

c. Predict the mean weekly sales of pet food for

stores with 8 feet of shelf space for pet food. What
would be the total value with a 95% confidence
level?

d. At the .05 level of significance, is there evidence

of a linear relationship between shelf space and
sales?

e. Construct a 95% confidence interval estimate of

the population slope

Page 1
Assessed Value Size (000 Sq Ft.) Age (years)
184.4 2.00 3.42
177.4 1.71 11.50
175.7 1.45 8.33
185.9 1.76 0.00
179.1 1.93 7.42
170.4 1.20 32.00
175.8 1.55 16.00
185.9 1.93 2.00
178.5 1.59 1.75
179.2 1.50 2.75
186.7 1.90 0.00
179.3 1.39 0.00
174.5 1.54 12.58
183.8 1.89 2.75
176.8 1.59 7.17

Develop a model to predict the assessed value (in thousands of dollars), using
the size of the houses (in thousands of square feet) and the age of the houses
(in years) from the data above.

a. State the multiple regression equation

b. Interpret the meaning of the slopes in this equation

c. Predict the mean assessed value for a house that is 1,750 square feet and is
10 years old.

d. Determine whether there is a significant relationship between assessed

value and the two independent variables at the 0.05 significance level (this is
the F test)

e. At the 0.05 level of significance, determine whether each independent

variable makes a significant contribution to the regression model.

f. The real estate assessor's office has been publicly quoted as saying that the
age of a house has no bearing on its assessed valued. Based on your answers
above, do you agree with this statement? Explain.