Question

Reliable Housewares is a local store that sells many household items and issues its own credit card to its

customers. The store manager wants to study the purchasing behavior of its "credit" customers. To that

end, he has come to DeVry and asked our MBA students for help. The manager has brought with him

data on five variables of 55 randomly selected credit customers.



LOCATION

(Rural, Urban, Suburban – Household location of the credit customer)



INCOME

(in $1,000's – be careful with this)



SIZE

(Household Size - number of people living in the household of credit customer)



YEARS

(the number of years that the customer has lived in the current location)



CREDIT BALANCE

($ balance on customer’s store credit card)

336666666666666666666666666666 783333 a $550000000000000000000000000000 525555555555555555555555555555 ea-14 14 8531 ||11 10 11 26 18-4-18-1 7-525-4 3 261254256232342|4362722454-6737 8 0 656556 rbb LSRUUSRUUUUU_SUSRUSSRUSR_RSSRUSUS )6 59 0 4 4 7 3 4 64 1017|145|18 0897445285183108 n 977202 2 OTT Ca -4354-42344442244422453534 06-6922-3587 7536598 el-1-1-4-90 23-24. 5 2 2 1 2 4 3 3 4 1 2 3 4 621563727 02015706158735351 533535346524236652 bbb ir ir b LURSSRURUSUUURRUSUURUSUSRU bb ir b 0 1 2 3 4 5 6 7 8 9 0 1

Regression and Correlation Analysis

Using Excel perform the regression and correlation analysis for the data on CREDIT BALANCE (Y) and SIZE (X) by

answering the following.

In an attempt to improve the model, we attempt to do a multiple regression model predicting CREDIT BALANCE

based on INCOME, SIZE and YEARS.

1. Using Excel run the multiple regression analysis using the variables INCOME, SIZE and YEARS to predict

CREDIT BALANCE. State the equation for this multiple regression model.

2. Perform the Global Test for Utility (F-Test). Explain your conclusion.

3. Perform the t-test on each independent variable. Explain your conclusions and clearly state how you

should proceed. In particular, which independent variables should you keep and which should you discard

if any.

Answer 1

on slatstics Regvessi ply R 0.763239353 Jused R s6559 ANOVA SSMS 12593860.5 2153305395 83 19724G18 371G2. 626 df an' 2453-1 501 4714879크5 coefenents Standid er rt stat 269.9 p-value Loue.95atu en9s.aey950 up en95.cl. Tatexce

y 20.13x+3261. 6000 5000 4000 3000 Linear ) 2000 1000 0 20 40 0 10 30 60 50

Cowelation coere: cient γ O. 763239353 theve exists a positive covve lation between cvedft balaned and size Coefficient of dele vmiratilon ' O. 5825