Problem:
You own a group of convenience stores in North Carolina and are interested in developing a forecasting model to use in predicting the average daily sales of a given convenience store to guide future purchases or construction of additional stores. You have collected the following data on your current stores:
|
Store
|
Daily Sales
|
Store Area
|
Parking Spaces
|
Household Income
|
|
1
|
1840.00
|
532
|
6
|
44,000
|
|
2
|
1746.00
|
478
|
4
|
51,000
|
|
3
|
1812.00
|
530
|
7
|
45,000
|
|
4
|
1806.00
|
508
|
7
|
46,000
|
|
5
|
1792.00
|
514
|
5
|
44,000
|
|
6
|
1825.00
|
556
|
6
|
46,000
|
|
7
|
1811.00
|
541
|
4
|
49,000
|
|
8
|
1803.00
|
513
|
6
|
52,000
|
|
9
|
1830.00
|
532
|
5
|
46,000
|
|
10
|
1827.00
|
537
|
5
|
46,000
|
|
11
|
1764.00
|
499
|
3
|
48,000
|
|
12
|
1763.00
|
490
|
4
|
48,000
|
|
13
|
1825.00
|
510
|
8
|
47,000
|
|
14
|
1846.00
|
516
|
8
|
45,000
|
|
15
|
1815
|
482
|
7
|
43,000
|
a. What factors should be used in forecasting daily sales and WHY?
b. You have been offered two stores for sale and can afford only one at this time. The first is 500 ft2, 6 parking places and in a neighborhood with a household income of 50,000/yr. The other is 560 ft2, 8 parking places in an area with a household income of 42,500/yr. Which store should have higher daily sales?