Linear Regression and Correlation for suburban hotels
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A suburban hotel derives its gross income from its hotel and restaurant operations. The owners are interested in the relationship between the number of rooms occupied on a nightly basis and the revenue per day in the restaurant. Below is a sample of 25 days (Monday through Thursday) from last year showing the restaurant income and number of rooms occupied.
Day Income Occupied
1 $1,452 23
2 1,361 47
3 1,426 21
4 1,470 39
5 1,456 37
6 1,430 29
7 1,354 23
8 1,442 44
9 1,394 45
10 1,459 16
11 1,399 30
12 1,458 42
13 1,537 54
14 $1,425 27
15 1,445 34
16 1,439 15
17 1,348 19
18 1,450 38
19 1,431 44
20 1,446 47
21 1,485 43
22 1,405 38
23 1,461 51
24 1,490 61
25 1,426 39
a)Does the breakfast revenue seem to increase as the number of occupied rooms increases? Draw a scatter diagram to support your conclusion.
b)Determine the coefficient of correlation between the two variables. Interpret the value.
d)What percent of the variation in revenue in the restaurant is accounted for by the number of rooms occupied?
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Solution Summary
The solution conducts linear regression and correlation for suburban hotels.
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