The Manager of a Fast Food Restaurant Wants to Determine

question 148

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. $$\begin{array} { | c | c | } \hline \text { Number of vo uchers } & \text { Sales } \\\hline 4 & 12.8 \\\hline 7 & 15.4 \\\hline 5 & 13.9 \\\hline 3 & 11.2 \\\hline 19 & 18.7 \\\hline 10 & 17.9 \\\hline 8 & 16.8 \\\hline 6 & 15.9 \\\hline 3 & 11.5 \\\hline 5 & 13.9 \\\hline\end{array}$$ Test the significance of the slope against a suitable alternative, at the 5% level of significance. Justify your choice of the direction in your alternative hypothesis.

---

Definitions:

Cost of Direct Materials

Refers to the total cost of raw materials that are directly used in the production of goods.

Factory Depreciation

The process of allocating the cost of a physical factory plant and its equipment over its useful life, reflecting wear and tear over time.

Total Raw Materials

The sum of all raw materials that are available for use in the production process, including both those already in process and those in stock waiting to be used.

Direct Labor Costs

Expenses directly associated with the labor used in producing goods or services, including wages for employees who work on the production line.