A manager of a local package delivery store believes that too many of the packages were damaged or lost. She extracts a sample of 75 packages with the following variables: the package number (Package), the status of the package (Status: Delivered, Damaged, or Lost), the delivery type (Delivery: Standard, Express, or Same day), and the size of the package (Size: S, M, L, and XL). A portion of the data is shown in the accompanying table.

a. Transform the Delivery variable into dummy variables. Use the most frequent category as the reference category. How many dummy variables should be created? Which category of Delivery is the reference category? 

b. Combine the two least frequent categories in the Size variable into a new category called Other. How many observations are there in the new category? 

c. Replace the category names in the Status variable with scores 1 (Lost), 2 (Damaged), or 3 (Delivered). What is the average status score of the 75 packages?

Transcribed Image Text:

Package 1 2 ⠀ 75 Status Delivered Damaged ⠀ Lost Delivery Standard Express B Same day Size XL S *** M