Management proposed the following regression model to predict sales at a fast-food outlet:
where yi =b0 + b1x1,i + b2x2,i + b3x3,i + ei
yi = sales ($1000s)
x1,I = number of competitors within one mile
x2,i = population within one mile (1000s)
x3,i = 1 if a drive up window is present and 0 otherwise
The following estimated regression equation was developed after 20 outlets were surveyed:
y^i = 10.1 - 4.2x1,i + 6.8x2,i + 15.3x3,i
a. What is the expected amount of sales attributable to the drive-up window?
b. Predict sales for a store with two competitors, a population of 8,000 within one mile, and no drive-up window.
c. Predict sales for a store with one competitor, a population of 3,000 within one mile, and a drive-up window.