# solution

2. A firm is considering two locations for a new store. Given the data below, forecast the sales for locations A and B. A. Draw and label a graph of the two variables. Does the relationship between sales and the number of households appear to be positive, negative or nonexistent? B. Using the information from the regression output below, what are the predicted sales for location A (13,250 households) and location B (12,500 households). Show your work. C. Based on the forecast, which location should be chosen? Why? D. What other independent variables could the firm consider adding to the analysis? Store Number 1 3 4 5 6 Annual Sales \$800,000 \$950,000 \$1,200,000 \$799,000 \$1,000,000 \$925,000 \$1,100,000 \$750,000 \$1,050,000 \$850,000 # households within a 10 minute drive of location 11,000 12,000 15,000 9,000 12,500 12,250 16,000 8,000 13,000 10,000 7 8 9 10 Coefficients Standardized Coefficients Beta t Sig Unstandardized Coefficients B Model Std. Error 1 (Constant) 294845.743 91874.195 NumberHouse 54.531 7.587 a Dependent Variable: Sales .012 3.209 7.187 931 .000