Question

Question 5 (1 point)

Suppose that for a typical FedEx package delivery, the cost of the shipment is a function of the weight of the package. You find out that the regression equation for this relationship is (cost of delivery) = 0.728*(weight) + 5.49. If a package you want to ship weighs 13.753 ounces and the true cost of the shipment is $12.229, the residual is -3.273. Interpret this residual in terms of the problem.

Question 5 options:

	1) The weight is 3.273 points less than what we would expect.
	2) The cost of delivery is 3.273 dollars greater than what we would expect.
	3) The cost of delivery is 3.273 dollars less than what we would expect.
	4) The weight is 3.273 points larger than what we would expect.
	5) The cost of delivery is 12.229 dollars less than what we would expect.

Answer 1

We have,

(cost of delivery) = 0.728*(weight) + 5.49

Now, when weight = 13.753

Then, expected (cost of delivery) = 0.728*(13.753) + 5.49

= $15.502

Actual cost of delivery = $12.229

Thus, expected (cost of delivery) - Actual cost of delivery = $(15.502 - 12.229)

= $3.273

Thus. we can now conclude

3) The cost of delivery is 3.273 dollars less than what we would expect.