14-22 Introduction to Multiple Regression One of the Most Common $( Y )$

question 154

Multiple Choice

14-22 Introduction to Multiple Regression One of the most common questions of prospective house buyers pertains to the cost of heating in dollars $( Y )$ . To provide its customers with information on that matter, a large real estate firm used the following 2 variables to predict heating costs: the daily minimum outside temperature in degrees of Fahrenheit $\left( X _ { 1 } \right)$ and the amount of insulation in inches $\left( X _ { 2 } \right)$ . Given below is EXCEL output of the regression model.
$\begin{array}{lr}\hline {\text { Regression Statistics }} \\\hline \text { Multiple R } & 0.5270 \\\text { R Square } & 0.2778 \\\text { Adjusted R Square } & 0.1928 \\\text { Standard Error } & 40.9107 \\\text { Observations } & 20 \\\hline\end{array}$

ANOVA


$\begin{array}{lrrrrrr} & \text { Coefficients } & \text { Standard Error } & t \text { Stat } & \text { P-value } & \text { Lower 95\% } & \text { Upper 95\% } \\\hline \text { Intercept } & 448.2925 & 90.7853 & 4.9379 & 0.0001 & 256.7522 & 639.8328 \\\text { Temperature } & -2.7621 & 1.2371 & -2.2327 & 0.0393 & -5.3721 & -0.1520 \\\text { Insulation } & -15.9408 & 10.0638 & -1.5840 & 0.1316 & -37.1736\end{array}$

Also $\operatorname { SSR } \left( X _ { 1 } \mid X _ { 2 } \right) = 8343.3572$ and $\operatorname { SSR } \left( X _ { 2 } \mid X _ { 1 } \right) = 4199.2672$
-Referring to Scenario 14-6, the estimated value of the regression parameter $\beta _ { 1 }$ in means that

• A) holding the effect of the amount of insulation constant, an estimated expected $1 increase in heating costs is associated with a decrease in the daily minimum outside temperature By 2.76 degrees.
• B) holding the effect of the amount of insulation constant, a 1 degree increase in the daily minimum outside temperature results in a decrease in heating costs by $2.76.
• C) holding the effect of the amount of insulation constant, a 1 degree increase in the daily minimum outside temperature results in an estimated decrease in mean heating costs by $2)76.
• D) holding the effect of the amount of insulation constant, a 1% increase in the daily minimum outside temperature results in an estimated decrease in mean heating costs by 2)76%.

Understand the financial implications of delaying investments or savings contributions.

Understand the Economic Order Quantity (EOQ) model and how it is used to minimize total inventory costs.

Calculate the EOQ and the related total cost for varying scenarios, including discounts and different inventory systems.

Identify and calculate optimal batch sizes for production processes with uneven flow.

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