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Multiple Regression Problem: Mail-order catalogue business.

A mail-order catalog business maintains a warehouse for distribution of products ordered. Management is currently investigating what factors affect distribution costs. Data has been collected for the past 24 months indicating warehouse distribution costs, sales, numbers of orders and average order processing time. See the Excel file containing the data. Assignment 7 part A data.xlsx.
1. Using the data below, perform regression analysis to determine how the three variables affect distribution costs. Show the final model and the work needed to reach this result. Use Alpha = 0.1.
2. Interpret the coefficients of the variables in the final model.
3. Why don't the coefficients in this problem (and regression problems in general) indicate the amount of influence each variable has?
4. Indicate the strength of relationship for the final model and interpret its value.
5. Given Sales of $475,000, number of orders of $4000, average processing time of 25 minutes, calculate distribution costs and interpret the numerical value.


Solution Summary

This solution is comprised of a detailed explanation the multiple regression problem with the help of excel. All the answers for 5 questions are given. In this solution, step-by-step explanation of this complicated topic provides students with a clear explanation.