Question

how can you use regression analysis to make a decision as a cashier? Include a description of the decision, what would be the independent and dependent variables, and how data could ideally be collected to calculate the regression equation.

Answer 1

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As a cashier I can decide how much cash to kept in change via the regression analysis.

The decision: I want to keep $ X,000 in change, as not all customers bring change.

Independent variables that I can use:

1. Number of customers that come into my restaurant

2. Day of the week. The hypothesis is that basically on weekends more customers come, and hence a higher change is required compared to weekdays

3. Average amount of meal - If mean is pricey, or is of a substantial amount then customer pays through credit/debit card and change is not required to transact. This can be a categorical variable too.

4. Number of people eating the meal - If its more than 2 , then usually people pay by card, hence no cash is require.

Dependent variable : The total change required on a day

How can this data be collected?

We record the change disposed for every meal, every day for a duration of 30 days. We also record customer' bills to record the above independent variables. We use these for our regression analysis.