Sherri Cola Company Has Developed a Regression Model Relating Its

question 37

Essay

Sherri Cola Company has developed a regression model relating its sales Y in $10,000s) with four independent variables. The four independent variables are price per unit PRICE, in dollars), competitor's price COMPRICE, in dollars), advertising ADV, in $1,000s) and type of container used CONTAIN; 1 = Cans and 0 = Bottles). Part of the regression results is shown below. Assume n = 25)
$\begin{array}{lr}&\text { Coefilicient }&\text { Standard Error }\\\text { Intercept } & 443.143 & \\\text { PRICE } & -57.170 & 20.426 \\\text { COMPRICE } & 27.681 & 19.991 \\\text { ADV } & 0.025 & 0.023 \\\text { CONTAIN } & -95.353 &91.027\end{array}$
a. If the manufacturer uses can containers, his price is $1.25, advertising $200,000, and his competitor's price is $1.50, what is your estimate of his sales? Give your answer in dollars.
b. Test to see if there is a significant relationship between sales and unit price. Let α = 0.05.
c. Test to see if there is a significant relationship between sales and advertising. Let α = 0.05.
d. Is the type of container a significant variable? Let α = 0.05.
e. Test to see if there is a significant relationship between sales and competitor's price. Let α = 0.05.

---

Definitions:

Clean Water Act

United States federal law aimed at reducing pollution and protecting the quality of the nation's waters.

Discharge Permit

Authorization granted by a regulatory body allowing the release of certain pollutants into the environment under specified conditions.

Best Available Technology

A term used, especially in environmental regulations, to refer to the most advanced and effective methods and equipment for controlling pollution.

Federal Water Pollution Control Act

A key piece of environmental legislation in the United States aimed at reducing and regulating water pollution.