Question: As indicated by the opening vignette to this chapter, a motel chain could use regression to determine good locations for new motels from data on

As indicated by the opening vignette to this chapter, a motel chain could use regression to determine good locations for new motels from data on existing motels. The data in the file P10_63.xlsx provide one possibility. The Existing Sites sheet contains data on 90 motels in the chain. The cell comments in row 1 explain the variables, and the last variable, Operating Margin, is used as the dependent variable. The Potential Sites sheet contains data on five potential sites, but the dependent variable for these sites is unknown. Run a regression on the first sheet and discuss the results. Then use the regression equation to predict Operating Margin for the potential sites. Where would you suggest the company should locate one or more new motels? Note that the data on Indoor Pool have been omitted for the potential sites. After all, the company gets to decide whether to build an indoor pool. How should you handle this variable in the predictions?

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Motel Indoor pool Competitor rooms Distance to competitor Office space Median income Distance to downtown Operating Margin 1 Yes 3478 01 560 57 129 503 2 No 2967 14 529 555 04 446 3 No 2613 18 249 615 ... View full answer

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