Question Two [5 marks] Snappy-cakes is a national chain of gourmet dessert delivery services that maintains a large fleet of refrigerated delivery vehicles. The CEO believes that demand is affected by daily temperature , with greater demand for desserts on hotter days. They would like to hire out some of the fleet to other businesses on days of low demand. You have been asked to assess the relationship between demand and temperature at one of the flagship stores. For a particular store you extract three day ahead forecasts for daily average temperature (x/) for a sample of 40 days and have calculated the following aggregates: Ex, =958 and Ex, = 23018 For the days the forecasts were made , you match the daily delivery demand (y;) and have also calculated the following: Caper Sch Ey, = 3862 and Ly. = 412938 i-l 7=1 Finally , the sum of the cross products for the two variables is Ex,y, =92251 (a) Find the unbiased sample estimate of the Covariance and state what this value is telling us about the relationship between these two variables. [2 marks] (b) Find the correlation coefficient and briefly discuss what this value is telling you about the relationship between these two variables and whether we might be able to get useful forecasts for demand when we know the forecast of the temperature. OBBD4 [3 marks] Total marks: 5 = 2+3