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Kerri Reynolds, owner of Flower Mode, operates a local chain of floral shops. Each shop has its own delivery van. Instead of charging a flat
Kerri Reynolds, owner of Flower Mode, operates a local chain of floral shops. Each shop has its own delivery van. Instead of charging a flat delivery fee, Reynolds wants to set the delivery fee based on the distance driven to deliver the flowers. Reynolds wants to separate the foxed and variable portions of her van operating costs so that she has a better idea how delivery distance affects these costs. She has following data from the past seven months: Data Table Read Requirements Requil Month Miles Driven 16.000 ys Use Microsoft Excel to run a regression analysis, then do the following: 1. Determine the company's cost equation (use the output from the Excel regression) 2. Determine the R-square (use the output from the Excel regression). What does Flower Mode's R-square indicate? 3. Predict van operating costs at a volume of 15,500 miles assuming the company would use the cost equation from the Excel regression regardless of its R-square. Should the company rely on this cost estimate? Why or why not? January February March 17,500 14.900 16,200 Van Operating costs $5.490 55,700 $4,910 $5.340 $5,820 $5,410 $4.920 April May June July 16.900 15.100 14,500 Print Done CRISWO Print Done Enter any number BOIS nonton parts remaining
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