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# Best Model

We are predicting the number of units sold for a local factory that produces snowmobiles. The available annual data are the expenses (in \$000), the number of employees, and the rainfall (in in.). Find the best model using the following table.

Year Expenses #Employees Rainfall Units Sold
1987 5300 230 34 5836
1988 4700 227 39 5921
1989 6500 229 32 5745
1990 6800 233 41 5990
1991 6450 236 36 6312
1992 7250 238 38 6151
1993 7600 240 35 6423
1994 7800 215 38 5975
1995 8100 216 33 6045
1996 7900 218 37 6123
1997 7850 217 34 6215
1998 8450 214 35 6187
1999 7900 216 36 6279
2000 8600 217 39 6386
2001 8850 216 40 6479
2002 8900 218 42 6332
2003 9150 217 36 6408

a. "Year" may be used as an x-variable.

b. The overall model is significant.

c. All x-variables are significant.

d. The coefficient of determination is greater than .7.

e. If we eliminate a variable, rainfall would be our first choice.

#### Solution Preview

I use the econometric method to build a sales model given the data provided. I ...

#### Solution Summary

We are predicting the number of units sold for a local factory that produces snowmobiles. The available annual data are the expenses (in \$000), the number of employees, and the rainfall (in in.). Find the best model using the following table.

Year Expenses #Employees Rainfall Units Sold
1987 5300 230 34 5836
1988 4700 227 39 5921
1989 6500 229 32 5745
1990 6800 233 41 5990
1991 6450 236 36 6312
1992 7250 238 38 6151
1993 7600 240 35 6423
1994 7800 215 38 5975
1995 8100 216 33 6045
1996 7900 218 37 6123
1997 7850 217 34 6215
1998 8450 214 35 6187
1999 7900 216 36 6279
2000 8600 217 39 6386
2001 8850 216 40 6479
2002 8900 218 42 6332
2003 9150 217 36 6408

a. "Year" may be used as an x-variable.

b. The overall model is significant.

c. All x-variables are significant.

d. The coefficient of determination is greater than .7.

e. If we eliminate a variable, rainfall would be our first choice.