In problem concerning pet food sales, the marketing manager used shelf space for pet food to predict weekly sales.
a. Is it necessary to compute the Durbin-Watson statistic in this case? Explain.
b. Under what circumstances is it necessary to compute the Durbin-Watson statistic before proceeding with the least-squares method of regression analysis?
Problem
The marketing manager of a large supermarket chain has the business objective of using shelf space most efficiently. Toward that goal, she would like to use shelf space to predict the sales of a specialty pet food. Data are collected from a random sample of 12 equalsized stores, with the following results (stored in PetFood):
Store | Shelf Space (X)(square feet) | Weekly Sales (Y)($) |
1 | 5 | 160 |
2 | 5 | 220 |
3 | 5 | 140 |
4 | 10 | 190 |
5 | 10 | 240 |
6 | 10 | 260 |
7 | 15 | 230 |
8 | 15 | 270 |
9 | 15 | 280 |
10 | 20 | 260 |
11 | 20 | 290 |
12 | 20 | 310 |
a. Construct a scatter plot.
For these data, b0 = 145 and b1 = 7.4.
b. Interpret the meaning of the slope, b1, in this problem.
c. predict the weekly sales of pet food for stores with 8 square feet of shelf space for pet food.
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