A mail-order catalog business that sells personal computer supplies, software, and hardware maintains a centralized warehouse for the distribution of products ordered. Management is currently examining the process of distribution from the warehouse and is interested in studying the factors that affect warehouse distribution costs. Currently, a small handling fee is added to the order, regardless of the amount of the order. Data that indicate the warehouse distribution costs and the number of orders received have been collected over the past 24months and stored in Warecost .The results are

a. Assuming a linear relationship, use the least-squares method to find the regression coefficients b0 and b1.
b. Predict the monthly warehouse distribution costs when the number of orders is 4,500.
c. Plot the residuals versus the time period.
d. Compute the Durbin-Watson statistic. At the 0.05 level of significance, is there evidence of positive autocorrelation among the residuals?
e. Based on the results of (c) and (d), is there reason to question the validity of the model?

Transcribed Image Text:

723178422095987- 3312726885736086 nr ,0 8 3 2 2 0 2 8 2 7 4 9 9 4 9 554072731 u (435444345442343453554354 a-56891 3948809844043180 .0 3 8 0 9 3 9 3 4 7 523718 2. 1 5 3 2 8 2 0 2 4 0 4 2 2 8 9 49039396 be-578676578775675795996586 n-234567890-234567890-234 2