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Correlation analysis on hotel revenue.

40. 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 Day Income Occupied
1 $1452 23 14 $1425 27
2 1361 47 15 1445 34
3 1426 21 16 1439 15
4 1470 39 17 1348 19
5 1456 37 18 1450 38
6 1430 29 19 1431 44
7 1354 23 20 1446 47
8 1442 44 21 1485 43
9 1394 45 22 1405 38
10 1459 16 23 1461 51
11 1399 30 24 1490 61
12 1458 42 24 1426 39
13 1537 54

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.

c. Is it reasonable to conclude that there is a positive relationship between revenue and
occupied rooms? Use the .10 significance level.

d. What percent of the variation in revenue in the restaurant is accounted for by the number of rooms occupied?

Solution Summary

Step by step method for computing correlation of gross income from its hotel and restaurant operations.

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