Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

companies In the U.S. car rental market vary greatly in terms of the size of the fleet, the number of locations, and annual revenue. In

image text in transcribed
companies In the U.S. car rental market vary greatly in terms of the size of the fleet, the number of locations, and annual revenue. In 2011, Hertz had 320,000 cars in service and annual revenue of approximately $4.2 billion. Suppose the following d annual revenue ($ millions) for six smaller car rental companies, Cars Revenue Company (1,000s) $ millions) Company A 11.5 118 Company B 10.0 135 Company C 9.0 100 Company D 5.5 37 Company E 4.2 42 Company F 3.3 30 (a) Develop a scatter diagram with the number of cars in service as the independent variable. 160 2 160 160 140 140 140 140 120 120 120 120 100 100 100 100 80 80 80 Annual Revenue ($ millions) Annual Revenue ($ millions) 8 Annual Revenue ($ millions) 60 60 8 Annual Revenue ($ m 40 40 20 20 20 8 10 12 14 2 10 12 14 2 6 10 12 14 2 8 10 12 14 O Cars in Service (1,000s) Cars in Service (1,000s) Cars in Service (1,000s) Cars in Service (1,000s) (b) What does the scatter diagram developed in part (a) indicate about the relationship between the two variables? There appears to be a negative linear relationship between cars in service (1,000s) and annual revenue ($ millions). There appears to be a positive linear relationship between cars in service (1,000s) and annual revenue ($ millions). There appears to be no noticeable relationship between cars in service (1,000s) and annual revenue ($ millions). (c) Use the least squares method to develop the estimated regression equation that can be used to predict annual revenue (in $ millions) given the number of cars in service (in 1,000s). (Round your numerical values to three decimal places.) (d) For every additional car placed in service, estimate how much annual revenue will change (in dollars). (Round your answer to the nearest integer.) Annual revenue will increase by $ , for every additional car placed In service. (e) A particular rental company has 11,000 cars in service. Use the estimated regression equation developed in part (c) to predict annual revenue (in $ millions) for this company. (Round your answer to the nearest Integer.) million

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamentals Of Calculus

Authors: Carla C Morris, Robert M Stark

1st Edition

1119015367, 9781119015369

More Books

Students also viewed these Mathematics questions

Question

What are the general types of interviews? Explain each.

Answered: 1 week ago

Question

6 How can HRM contribute to ethical management and sustainability?

Answered: 1 week ago