The Manager of a Fast Food Restaurant Wants to Determine

question 181

Essay

The manager of a fast food restaurant wants to determine how sales in a given week are related to the number of discount vouchers (#) printed in the local newspaper during the week. The number of vouchers and sales ($000s) from 10 randomly selected weeks is given below with Excel regression output. $$\begin{array} { | c | c | } \hline \text { Number of vo uchers } & \text { Sales } \\\hline 4 & 12.8 \\\hline 7 & 15.4 \\\hline 5 & 13.9 \\\hline 3 & 11.2 \\\hline 19 & 18.7 \\\hline 10 & 17.9 \\\hline 8 & 16.8 \\\hline 6 & 15.9 \\\hline 3 & 11.5 \\\hline 5 & 13.9 \\\hline\end{array}$$ a. Write down the regression equation
b. Interpret the slope.

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Definitions:

Supply Costs

The expenses incurred in acquiring the materials and services necessary for production or operations.

Square Feet

A unit of area measurement equal to a square that measures one foot on each side, commonly used in the United States.

Spending Variance

is the difference between the actual amount spent on materials, labor, or overhead and the budgeted amount for these items.

Fixed Cost

An expense that remains constant, irrespective of the volume of products or services manufactured or traded.