Question

In: Statistics and Probability

A large grocery retailer tracks productivity and costs of its facilities closely. Data in the Grocery...

A large grocery retailer tracks productivity and costs of its facilities closely. Data in the Grocery retailer file were obtained from a single distribution center for a one-year period. Each data point for each variable represents one week of activity. The variables included are total labor hours required to handle a shipment (Y) in the first column, the number of cases shipped (X1) in the second column, the indirect costs of the total labor hours as a percentage (X2) in the third column, and a qualitative predictor called holiday (X3: 1 if holiday week, 0 otherwise) in the last column.

  1. Interpret the meaning of the estimated
    1. intercept term,
    2. coefficient of X1
    3. coefficient of X2.
    4. coefficient of X3.


LaborHours NoShipped IndLaborCost HolidayWeek
4264    305657 7.17    0

4496    328476 6.20    0

4317    317164 4.61    0

4292    366745 7.02    0

4945    265518 8.61    1

4325    301995 6.88    0

4110    269334 7.23    0

4111    267631 6.27    0

4161    296350 6.49    0

4560    277223 6.37    0

4401    269189 7.05    0

4251    277133 6.34    0

4222    282892 6.94    0

4063    306639 8.56    0

4343    328405 6.71    0

4833    321773 5.82    1

4453    272319 6.82    0

4195    293880 8.38    0

4394    300867 7.72    0

4099    296872 7.67    0

4816    245674 7.72    1

4867    211944 6.45    1

4114    227996 7.22    0

4314    248328 8.50    0

4289    249894 8.08    0

4269    302660 7.26    0

4347    273848 7.39    0

4178    245743 8.12    0

4333    267673 6.75    0

4226    256506 7.79    0

4121    271854 7.89    0

3998    293225 9.01    0

4475    269121 8.01    0

4545    322812 7.21    0

4016    252225 7.85    0

4207    261365 6.14    0

4148    287645 6.76    0

4562    289666 7.92    0

4146    270051 8.19    0

4555    265239 7.55    0

4365    352466 6.94    0

4471    426908 7.25    0

5045    369989 9.65    1

4469    472476 8.20    0

4408    414102 8.02    0

4219    302507 6.72    0

4211    382686 7.23    0

4993    442782 7.61    1

4309    322303 7.39    0

4499    290455 7.99    0

4186    411750 7.83    0

4342    292087 7.77    0

Solutions

Expert Solution

Using Excel, go to Data, select Data Analysis, choose Regression. Put values of No. Shipped, IndLaborCost and HolidayWeek in X input range and LabourHours in Y input range.

Coefficients Standard Error t Stat P-value
Intercept 4149.887 195.565 21.220 0.000
No Shipped 0.001 0.000 2.159 0.036
IndLaborCost -13.166 23.092 -0.570 0.571
HolidayWeek 623.554 62.641 9.954 0.000

1. Intercept = 4149.887

This means labour hours will be 4149.887 when value of all the independent variables (No. Shipped, IndLaborCost and HolidayWeek) is 0.

2. Coefficient of X1 = 0.001

This means with one unit increase in no. of cases shipped, labour hours increase by 0.001.

3. Coefficient of X2 = -13.166

This means with one unit increase in indirect costs, labour hours decrease by 13.166.

4. Coefficient of X3 = 623.554

This means that labours hours would increase by 623.554 if its a holiday week.

orchestra answered 1 year ago
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