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Item7

Item 7 8.33 points

Brews 4 U is a local chain of coffee shops. Managers are interested in the costs of the stores and believe that the costs can be explained in large part by the number of customers patronizing the stores. Monthly data regarding customer visits and costs for the preceding year for one of the stores have been entered into the regression analysis.

Average monthly customer-visits		1,462
Average monthly total costs	$	4,629
Regression results:
Intercept	$	1,496
b coefficient	$	2.08
R2		0.86814

Required:

a. In a regression equation expressed as y = a + bx, how is the letter b best described?

• The letter b is best described as the estimate of the cost for an additional customer visit.

• The letter b is best described as the observed store cost for a given month.

• The letter b is best described as the observed customer visits for a given month.

b. How is the letter y in the regression equation best described?

• The letter y is best described as the estimate of the cost for an additional customer visit.

• The letter y is best described as the observed store cost for a given month.

• The letter y is best described as the observed customer visits for a given month.

c. How is the letter x in the regression equation best described?

• The letter x is best described as the estimate of the cost for an additional customer visit.

• The letter x is best described as the observed store cost for a given month.

• The letter x is best described as the observed customer visits for a given month.

d. Based on the data derived from the regression analysis, what are the estimated costs for 1,600 customer-visits in a month?

e. What is the percent of the total variance that can be explained by the regression equation? (Enter your answer as a percentage rounded to 1 decimal place. (i.e., 32.1))