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The Manager of a Fast Food Restaurant Wants to Determine

question 31

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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 the predicted sales.
Calculate the residuals.  Observation  Sales  Predicted Sales 112.813.4147215.414.8000313.913.8765411.212.9529518.720.3412617.916.1853716.815.2618815.914.3382911.512.95291013.913.8765\begin{array} { | c | c | c | } \hline \text { Observation } & \text { Sales } & \text { Predicted Sales } \\\hline 1 & 12.8 & 13.4147 \\\hline 2 & 15.4 & 14.8000 \\\hline 3 & 13.9 & 13.8765 \\\hline 4 & 11.2 & 12.9529 \\\hline 5 & 18.7 & 20.3412 \\\hline 6 & 17.9 & 16.1853 \\\hline 7 & 16.8 & 15.2618 \\\hline 8 & 15.9 & 14.3382 \\\hline 9 & 11.5 & 12.9529 \\\hline 10 & 13.9 & 13.8765 \\\hline\end{array}

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Definitions:

Operating Income

The profit realized from a business's core operations, excluding deductions of interest and taxes.

Accrual-Based

An accounting method that records revenues and expenses when they are incurred, regardless of when cash is exchanged.

Mutual Ownership

A form of ownership where an institution, such as a mutual insurance company or building society, is owned by its members or policyholders.

Direct Control

The ability of an entity to influence the operations and financial decisions of another entity directly, often through ownership of voting shares.

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