The Manager of a Fast Food Restaurant Wants to Determine

question 197

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 the predicted sales.
Calculate the residuals. $$\begin{array} { | c | c | c | c | } \hline \text { Observation } & \text { Sales } & \text { Predicted Sales } & \text { Residuals } \\\hline 1 & 12.8 & 13.4147 & - 0.6147 \\\hline 2 & 15.4 & 14.8000 & 0.6000 \\\hline 3 & 13.9 & 13.8765 & 0.0235 \\\hline 4 & 11.2 & 12.9529 & - 1.7529 \\\hline 5 & 18.7 & 20.3412 & - 1.6412 \\\hline 6 & 17.9 & 16.1853 & 1.7147 \\\hline 7 & 16.8 & 15.2618 & 1.5382 \\\hline 8 & 15.9 & 14.3382 & 1.5618 \\\hline 9 & 11.5 & 12.9529 & - 1.4529 \\\hline 10 & 13.9 & 13.8765 & 0.0235 \\\hline\end{array}$$ Compute the standardised residuals.

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Definitions:

Shares Outstanding

Shares outstanding refer to the total number of shares of a company held by all its shareholders, including share blocks held by institutional investors and restricted shares owned by the company’s insiders.

BEP

BEP, or Break-Even Point, is the financial analysis point at which total costs and total revenues are equal, implying no net loss or gain.

Operating Costs

Expenses associated with the day-to-day operations of a business, including costs of goods sold, payroll, and overhead.

Net Sales

Net Sales is the revenue generated from sales of products or services, after deducting returns, allowances for damaged or missing goods, and discounts.