A regional retailer would like to determine if the variation in average monthly store sales can, in part, be explained by the size of the store measured in square feet. A random sample of 21 stores was selected and the store size and average monthly sales were computed. The following results are shown:

Store Size (Sq. Ft) Average Monthly Sales 17,400 $581,241 15,920 $538,275 17,440 $636,059 17,320 $574,477 15,760 $558,043 20,200 $689,256 15,280 $552,569 17,000 $584,737 11,920 $470,551 12,400 $520,798 15,640 $619,703 12,560 $465,416 21,680 $730,863 14,120 $501,501 16,680 $624,255 14,920 $567,043 18,360 $612,974 18,440 $618,122 16,720 $691,403 19,880 $719,275 17,880 $536,592

a. Develop a simple linear regression model to explain the variation in average monthly sales based on the size of the store.

b. Construct and interpret a 95% confidence interval estimate for the regression slope coefficient.

c. Provide a 90% confidence interval for the average value of monthly sales when xp = 15,000.

d. Provide a 90% prediction interval for a particular month’s average sales when the store size is 15,000 square feet.

Computer Software Exercises