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SuperBike, Inc. owns a bike service station in Florida, where the climate is warm year-round. Customers have often expressed the need, especially during summer,
SuperBike, Inc. owns a bike service station in Florida, where the climate is warm year-round. Customers have often expressed the need, especially during summer, for a cold drink facility at the station. The Smart Beverage Company has offered to lease SuperBike a cold drink vending machine for $400 per month plus $0.40 per can of cold drink. SuperBike would sell each can of cold drink for $1.50. A regression equation estimated based on 30 observations gave the following prediction of sales of cans of cold drinks: Sales units = 0.70 (number of customers) + 60 per month. The standard error of the estimate is 80 units. Required: You must provide all detailed supporting calculations. a. Assume that SuperBike, Inc. expects 1,400 customers in June 2022, what are the best estimates of number of cans of cold drinks sold and income for the month? (2 marks) b. What range of income can SuperBike expect with 95% confidence in June 2022? (4 marks) c. What is the required number of customers SuperBike must have to be 90% confident to make a profit of $645 in the month of June 2022? (4 marks) d. What is the probability the SuperBike would earn zero income in June 2022? (5 marks).
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