Question
Frank's Convenience Marts (FCM for short) are located throughout metropolitan Chicago. Suzanne, the business development manager, plans to open a new store in the Jackson
Frank's Convenience Marts (FCM for short) are located throughout metropolitan Chicago. Suzanne, the business development manager, plans to open a new store in the Jackson Park neighbourhood in south Chicago. She has found a potential location. To help with the financial analysis, she wants to forecast the daily sales based on data she draws from current stores. Specifically, she selected a random sample of 15 existing stores, and her assistant Nick helped her collect average daily sales, the floor space (area, in square feet) and the median income of families in that ZIP code region for each store. This data is under the worksheetBasic Datain the fileQ4_FMC.xlsx.
Basic Data:
Sampled Mart | Daily Sales | Store Area | Area Income ($ thousand) |
1 | 1840 | 532 | 44 |
2 | 1746 | 478 | 51 |
3 | 1812 | 530 | 45 |
4 | 1806 | 508 | 46 |
5 | 1792 | 514 | 44 |
6 | 1825 | 556 | 46 |
7 | 1811 | 541 | 49 |
8 | 1803 | 513 | 52 |
9 | 1830 | 532 | 46 |
10 | 1827 | 537 | 46 |
11 | 1764 | 499 | 48 |
12 | 1825 | 510 | 47 |
13 | 1763 | 490 | 48 |
14 | 1846 | 516 | 45 |
15 | 1815 | 482 | 43 |
Conduct a multiple linear regression using Daily Sales as the dependent variable and Store Area and Area Income as the independent variables. Write out the regression equation based on this model, and attach the regression output as a screenshot picture. Explain the meaning of each of the coefficients. Should all independent variables be included in the model, and why? Comment on the overall quality of this regression model.
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