A? mail-order catalog business selling personal computer? supplies, software, an
ID: 2909224 • Letter: A
Question
A? mail-order catalog business selling personal computer? supplies, software, and hardware maintains a centralized warehouse. Management is currently examining the process of distribution from the warehouse. The business problem facing management relates to the factors that affect warehouse distribution costs.? Currently, a handling fee is added to each? order, regardless of the amount of the order. Data collected over the past
24 months indicate the warehouse distribution costs? (in thousands of? dollars), the sales? (in thousands of? dollars), and the number of orders received. .
Costs Sales Orders
52.46 384 4,008
71.32 447 3,818
85.13 512 5,295
63.54 404 4,292
72.02 458 4,318
68.64 459 4,095
52.04 302 3,199
70.21 481 4,826
82.82 516 5,256
74.55 502 4,741
70.96 538 4,418
54.34 352 2,933
63.72 373 4,004
72.12 328 4,405
58.25 408 3,953
79.53 488 4,601
94.07 527 5,605
59.92 446 3,441
90.68 621 5,056
92.52 601 5,706
69.42 464 4,251
53.59 387 3,685
89.94 546 5,393
66.18 415 4,189
Explanation / Answer
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SUMMARY OUTPUT Regression Statistics Multiple R 0.934815021 R Square 0.873879124 Adjusted R Square 0.861867612 Standard Error 4.825764799 Observations 24 ANOVA df SS MS F Significance F Regression 2 3388.566272 1694.283136 72.75346562 3.61629E-10 Residual 21 489.0481237 23.28800589 Total 23 3877.614396 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0% Intercept -3.116126871 6.238595515 -0.499491731 0.622625949 -16.08999648 9.857742734 -16.08999648 9.857742734 X Variable 1 0.049260333 0.02042912 2.41128025 0.025137121 0.006775653 0.091745014 0.006775653 0.091745014 X Variable 2 0.011782507 0.002262558 5.20760344 3.67713E-05 0.007077259 0.016487754 0.007077259 0.016487754 Regression Equation : Costs = -3.116 + 0.049(Sales) + 0.012(Orders)