Homework Sourseeconometrics answer ALL questions and show ALL work The mana
econometrics
answer ALL questions and show ALL work
The management of Armand’s Pizza Parlors, a chain of Italian-food restaurants located in a 5-state area, is currently facing a problem. One of the most successful types of locations for Armand’s has been near a college campus.
Prior to opening a new restaurant Armand’s management requires an estimate of yearly sales revenues. Such an estimate is used in planning the appropriate restaurant capacity, making initial staffing decision, and deciding whether or not the potential revenues justify the cost of operation.
Suppose management believes that the size of the student population on the nearby campus is related to the annual sales revenues. On an intuitive basis, management believes restaurants located near larger campuses generate more revenue than those near small campuses. To evaluate the relationship between student population and annual sales, Armand’s collected data from a sample of 10 of its restaurants located near college campuses.
1. Calculate and interpret the correlation coefficient between student population and annual sales.
2. Write the population regression equation. Write the sample regression equation. What is the difference between the two in terms of notation?
3. Write the estimated regression equation. Interpret the coefficients.
4. Calculate SSR, SSE, and SST. What does each of these mean?
5. Calculate and interpret the coefficient of determination. What are the issues with the coefficient of determination? How are these issues addressed?
