Question
A Canadian grocery store chain has just acquire another chain of grocery stores with different target customers from the first. Before reviewing its new product
A Canadian grocery store chain has just acquire another chain of grocery stores with different target customers from the first. Before reviewing its new product distribution policy, following this acquisition, the chain of stores appointed an analyst to study the markets represented by urban agglomerations whose populations are located between 23,000 and 110,000 inhabitants. To do this, we analyze the data relating to a sample of 49 branches of the chain. The variables on which the information collected relates are: VNT, the branch's annual sales volume in thousands of $ for the previous year; POP, the estimated population in thousands of inhabitants of the urban agglomeration served by the branch during the previous year;
NBM, the number of stores, of the same type as those of the chain studied, in operation for a year in the urban area served by the branch (this number includes the branch).
Branches | VNT | POP | NBM |
S1 | 4 197 | 89,5 | 8 |
S2 | 4 622 | 92,6 | 8 |
S3 | 4 721 | 96,3 | 8 |
S4 | 6 817 | 98,4 | 7 |
S5 | 6 747 | 99,5 | 7 |
S6 | 4 830 | 25,4 | 2 |
S7 | 3 490 | 27,3 | 3 |
S8 | 3 785 | 30,4 | 3 |
S9 | 2 785 | 33,6 | 4 |
S10 | 5 608 | 36,0 | 3 |
S11 | 4 753 | 75,9 | 7 |
S12 | 6 516 | 77,0 | 5 |
S13 | 7 552 | 81,3 | 5 |
S14 | 5 166 | 86,2 | 7 |
S15 | 4 652 | 87,5 | 8 |
S16 | 4 021 | 39,2 | 4 |
S17. | 7 509 | 42,9 | 3 |
S18 | 5 750 | 43,6 | 4 |
S19 | 5 750 | 47,2 | 4 |
S20 | 2 370 | 47,7 | 6 |
S21 | 3 490 | 65,7 | 7 |
S22 | 8 759 | 66,3 | 4 |
S23 | 3 325 | 69,2 | 7 |
S24 | 7 583 | 71,1 | 5 |
S25 | 6 247 | 71,4 | 5 |
S26 | 3 170 | 62,4 | 6 |
S27 | 8 406 | 63,4 | 4 |
S28 | 3 915 | 64,9 | 7 |
S29 | 3 323 | 65,5 | 7 |
S30 | 4 892 | 50,2 | 5 |
S31 | 9 692 | 51,5 | 3 |
S32 | 3 800 | 52,1 | 5 |
S33 | 4 896 | 65,1 | 5 |
S34 | 7 612 | 61,1 | 4 |
S35 | 6 737 | 99,5 | 7 |
S36 | 4 820 | 25,4 | 2 |
S37 | 3 480 | 27,3 | 3 |
S38 | 3 775 | 30,4 | 3 |
S39 | 2 775 | 33,6 | 4 |
S40 | 5 600 | 36 | 3 |
S41 | 4 743 | 75,9 | 7 |
S42 | 6 507 | 77 | 5 |
S43 | 7 542 | 81,3 | 5 |
S44 | 5 146 | 86,2 | 7 |
S45 | 4 642 | 87,5 | 8 |
S46 | 4 011 | 39,2 | 4 |
S47 | 7 500 | 42,9 | 3 |
S48 | 5 740 | 43,6 | 4 |
S49 | 5 750 | 47,2 | 4 |
After rejecting the first model tested, the analyst tries a second in which the sales volume of a branch is explained by potential customers that it serves, which he defines as the estimated population of the agglomeration served divided by the number of stores of the same type as the chain studied for this city. It is therefore necessary to define a new variable POPL = POP/ NBM and to postulate model 2: VNT = b0 + b1 POPL. With Excel's Graphical Assistant, draw the point cloud by taking as x-axis (X) the variable "POPL" and as y-axis (Y) the variable "VNT
Does the new point cloud suggest a linear connection between these two variables: VNT and POPL? Explain
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