1. You are interested in developing a regression model to predict monthly sales of a departmental store. Discuss the independent variables that you might select. How would you select the functional form for these independent variables?
2. A retail company has information on the time taken (in days) to fulfill an order, the value of the order (in $10,000), the number of different types of products in the order, and the store location. The data are shown in Table.
(a) Find a simple regression model that predicts time to fulfill an order based on value of the order. Interpret the estimated model coefficients.
(b) What is the estimated standard deviation of the error component? Interpret it.
(c) What are the values of R2 and Ra2? Interpret them.
(d) Is there evidence to conclude that value of the order is a useful predictor? Test using α = 0.01.
(e) Interpret the p-value associated with the test in part (d).