Problem 1 (10 marks) File: MALL. XLS A national chain of women's clothing stores with locations in the large shopping malls thinks that it can do a better job of planning more renovations and expansions if it understands what variables impact sales. It plans a small pilot study on stores in 25 different mall locations. The data it collects consist of monthly sales, store size (sq. ft), number of linear feet of window display, number of competitors located in mall, size of the mall (sq. ft),and distance to nearest competitor (ft).

e. Plot the residuals versus the actual values. Do you think that the model does a good job of predicting monthly sales? Why or why not?

f. Find and interpret the value of r2 for this model.

g. Do you think that this model will be useful in helping the planners? Why or why not?

h. Test the individual regression coefficients. At the 0.05 level of significance, what are your conclusions?

i. If you were going to drop just one variable from the model, which one would you choose? Why?

MALL. XLS

Sales Size Windows Competitors Mall Size Nearest Competitor

4453 3860 39 12 943700 227

4770 4150 41 15 532500 142

4821 3880 39 15 390500 263

4912 4000 39 13 545500 219

4774 4140 40 10 329600 232

4638 4370 48 14 802600 257

4076 3570 37 16 463300 241

3967 3870 39 16 855200 220

4000 4020 44 21 443000 188

4379 3990 38 16 613400 209

5761 4930 50 15 420300 220

3561 3540 34 15 626700 167

4145 3950 36 14 601500 187

4406 3770 36 12 593000 199

4972 3940 38 11 347100 204

4414 3590 35 10 355900 146

4363 4090 38 13 490100 206

4499 4580 45 16 649200 144

3573 3580 35 18 685900 178

5287 4380 42 15 106200 149

5339 4330 40 10 354900 231

4656 4060 37 11 598700 225

3943 3380 34 16 381800 163

5121 4760 44 17 597900 224

4557 3800 36 14 745300 195