The Following Regression Model Has Been Proposed to Predict Monthly $\hat { Y }$

question 23

Short Answer

The following regression model has been proposed to predict monthly sales at a shoe store.
$\hat { Y }$ = 40 - 3X1 + 12X2 + 10X3
where
X1 = competitor's previous month's sales in $1,000s) X2 = store's previous month's sales in $1,000s)
X3 =
= sales in $1,000s)
$\hat { Y }$
a. Predict sales in dollars) for the shoe store if the competitor's previous month's sales were
$9,000, the store's previous month's sales were $30,000, and no radio advertisements were run.
b. Predict sales in dollars) for the shoe store if the competitor's previous month's sales were
$9,000, the store's previous month's sales were $30,000, and 10 radio advertisements were run.

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Definitions:

Standard

A recognized level of quality or attainment that is used as a benchmark for comparison.

Materials Quantity Variance

The difference between the expected amount of materials needed for production and the actual amount used, affecting production costs.

Standard

Typically refers to an accepted level of quality or achievement that is used as a measure, norm, or model in comparative evaluations.

Direct Materials

Raw materials that are directly traceable to the manufacturing of a specific product and are an integral part of the finished product.