Share
Explore BrainMass

Regression Line for Appetizer

You are a manager with Appetizer. The company owns a chain of restaurants in the United States. Appetizer is looking for an opportunity to expand. As part of a market analysis, you have to send a handout in a Word document to the COO of the company, exploring the relationship between the expenditure by people on purchasing food from stores and their expenditure in restaurants. Using the data provided in the Doc Sharing area:

Calculate the least squares regression line taking food store expenditure as the independent variable and restaurant expenditure as the dependent variable.

Calculate a point estimate and a confidence interval for the restaurant expenditure by people in a state whose food store expenditure is $5 billion.

Support your handout with a summary, recommending in which areas Appetizer should open its new restaurant. Create your summary in a Word document. You may use bullet points in your summary.

(X) (Y)
9300 7100 To Calculate the Regression Line, you need 5 summary Statistics:
10565 15500 Xbar (mean of X)
15000 4400 SDevX (Standard Deviation of X)
15000 4400 Ybar (Mean of Y)
17764 5900 SDevY (Standard Deviation of Y)
57000 4600 r (correlation between X and Y)
65940 8800
73676 2000
77006 2750 The regression line is represented by this formula:
93739 2550 Predicted Y= a + bX
146088 960 Where the slope (b) and intercept (a) are calculated as:
153260 1025 b= r * (SDevY/SDevX) a = Ybar - Xbar

X= Restaurant Expenditure
Y= Food Store Expenditures

Solution Summary

Step by step method for computing Regression Line for Appetizer.

$2.19