Brewsky's Is a Chain of Micro-Breweries -
in a Regression Equation Expressed as Y = a the Costs

question 122

Multiple Choice

Brewsky's is a chain of micro-breweries. 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 and the analysis is as follows:
$\begin{array}{llr} \text { Average monthly customer visits } &&1,462\\ \text { Average monthly total costs } &&\$4,629\\& \text { Regression Results} &\\ \text { Intercept} &&\$1,496\\ \text { \( b \) coefficient} &&\$2.08\\ \text { R } ^{2}&&0.86814\\ \end{array}$

-
In a regression equation expressed as y = a + bx, how is the letter b best described? (CMA adapted)

• A) An estimate of the probability of return customers.
• B) The fixed costs per customer visit.
• C) The estimate of the cost for an additional customer visit.
• D) The proximity of the data points to the regression line.

---

Definitions:

Grade

An evaluation or ranking, often numerical or alphabetical, used to represent the quality or performance level of an academic achievement or product.

Spearman's Rank Correlation

A measure that does not rely on parameters, used to determine the correlation in ranking, and assesses the ability to explain the relationship between two variables with a monotonic function.

Wheat Yield

The amount of wheat produced per unit area, commonly measured in bushels per acre or kilograms per hectare.

Rainfall

The total amount of rain that falls in a specific area over a specific period, often measured in millimeters or inches.