Perform a multiple regression analysis and determine if there is significant linear

relationship among the independent variables (number of miles traveled and number of
deliveries) and dependent variable (travel time). Also, determine the extent of relationship of
the variables understudy. What is the estimated travel time in hours if the number of miles
traveled in 115 and number of deliveries is 6?

Drivers Number of miles Number of deliveries Travel time in hours

traveled
A 100 4 9.3
B 50 3 4.8
C 100 4 8.9
D 100 2 6.5
E 50 2 4.2
F 80 2 6.2
G 75 3 7.4
H 65 4 6.0
I 90 3 7.0
J 90 2 6.1
Given these data, we will use MS Excel data analysis, regression analysis. The
results of the analysis are as follow:

SUMMARY OUTPUT

Regression Statistics
Multiple R 0.9472476752
R Square 0.8972781583
Adjusted R Square 0.8679290606
Standard Error 0.5827759071
Observations 10

ANOVA
df SS MS F
Regression 2 20.76660569456 10.383302847 30.572597808
Residual 7 2.377394305436 0.3396277579
Total 9 23.144

Coefficients Standard Error t Stat P-value

Intercept -0.783865 0.967541972542 -0.81016165 0.444512218
Number of miles traveled 0.059413 0.010054706979 5.909002365 0.0005940609
Number of deliveries 0.920966 0.224830082981 4.0962772334 0.0045945094

To test the hypothesis of no significant linear relationship of number of miles traveled and
number of deliveries with travel time in hours, look into the significance F-value shown in
ANOVA table and compare it with the level of significance of 0.05.

If significance F-value is less than .05 level of significance, reject the null hypothesis.

If significance F-value is greater than .05 level of significance, do not reject the null
hypothesis.

As shown on the ANOVA table, reject the null hypothesis, significance F-value of
0.000347 is less than .05 level of significance, which means at least one of the independent
variables (number of miles traveled and number of deliveries) has
significant linear relationship with travel times in hours.

To determine which of the independent variables (number of miles traveled and number of
deliveries) has significant relationship with travel times in hours, look into the p-values
shown on the table and compare it with .05 level of significance.
To determine which of the independent variables (number of miles traveled and number of
deliveries) has significant relationship with travel times in hours, look into the p-values
shown on the table and compare it with .05 level of significance.

If p-value is less than .05 level of significance, it means that particular independent
variable has significant linear relationship with the dependent variable.

Both the number of miles traveled (X1) and number of deliveries (X2) have p-values
(0.000594 and 0.004595 respectively) which are less than .05 level of significance,
which means both independent variables have significant linear relationships with travel
time in hours. This suggests that an increase on the number of miles traveled and on the
number of deliveries, travel time in hours increases as well.

To develop the multiple linear regression equation or model, focus on the coefficient
values shown on the table.

Multiple linear regression equation or model = Y = -0.783865 + 0.059413 X1 + 0.920966X2

This model means that the unit change in travel time in hours (Y) is 0.059413 for every
unit change in number of miles traveled (X1) when the other independent variables are
constant; and the unit change in travel time in hours (Y) is 0.920966 for every unit
change in number of deliveries (X2) when the other independent variables are constant. In
addition, the estimated value of travel time in hours (Y) is -0.78387 if both the numbers of
miles traveled and deliveries are zero (0).

Use the model to predict the value of travel time in hours with given values of number of
miles traveled and number of deliveries. For example,

What is the estimated travel time in hours if the number of miles traveled in 115 and
number of deliveries is 6?
Y = -0.783865 + 0.059413X1 + 0.920966X2
Y = -0.783865 + 0.059413(115) + 0.920966(6)
Y = 11.57

To determine the extent of linear relationship of the independent and dependent

variables, refer to the output table which shows the multiple r and multiple r².

The number of miles traveled and number of deliveries have very strong positive linear
relationship with travel time in hours based on its multiple r-value of 0.9472. Likewise, the
multiple r² suggests that 89.73% of the variation in travel time in hours can be explained by
its interaction with the number of miles traveled and number of deliveries,and that 10.27%
were caused by unexplained factors or factors which were not included in the study.
 Significance F
0.00034739198

Lower 95% Upper 95% Lower 95.0% Upper 95.0%

-3.0717386139 1.5040078115 -3.0717386139 1.5040078115
0.03563768335 0.0831888913 0.0356376834 0.0831888913
0.3893276836 1.452605017 0.3893276836 1.452605017
The president of a chain of fast-food restaurants has randomly selected 10
franchisees and recorded for each franchisee their last year net profit, counter sales, and
drive-through sales (all in million dollars). The gathered data are shown on the table below.
Perform a multiple regression analysis and determine if there is significant linear relationship
among the independent variables (counter sales and drive-through sales) and dependent
variable (net profit). Also, determine the extent of relationship of the variables understudy.
What is the estimated net profit for counter sales of 9.1 and drive-through sales of 8.9 (in
million dollars)?

Counter Sales Drive-through

Franchisee Net Profit (Y) (X1) Sales (X2)
1 1.5 8.4 7.5
2 0.8 3.3 4.5
3 1.2 5.8 8.4
4 1.4 10 7.8
5 0.2 4.7 2.4
6 0.8 7.7 4.8
7 0.6 4.5 2.5
8 1.3 8.6 3.4
9 0.4 5.9 2.0
10 0.6 6.3 4.1

The null hypothesis of no significant positive linear relationship between independent

variables (counter sales and drive through sales) and net profit of the franchisees is rejected
because its significance f-value of 0.00597 is less than .05 level of significance. This means
that at least one of the independent variables has significant positive linear relationship with
net profit of the franchisees.

In particular, the drive-through sales has significant positive linear relationship with the
franchisees’ drive through has its p-value of 0.023076 is less than .05 level of significance;
while counter sales has p-value of 0.090775 is greater than .05 level of significance.

Multiple linear regression equation model = Y = -0.22098 + 0.086339X1 + 0.113513X2

The model suggests that the value of net profit is -0.22098 if both counter sales and
drive-through sales are zero. It also shows that 0.086339 is the change in net profit for every
unit change in counter sales when other variables are held constant; and that 0.113513 is
the change in net profit for every unit change in drive through sales when other variables
are held constant.

What is the estimate net profit for counter sales of 9.1 and drive-through sales of 8.9 (in
million dollars)?
 Y = -0.22098 + 0.086339X1 + 0.113513X2
Y = -0.22098 + 0.086339(9.1) + 0.113513(8.9)
Y = 1.57

Based on the multiple r-value of 0.876635, counter sales, drive-through sales have high
positive linear relationship with net profit of franchisees. Likewise, its multiple r2 value
indicates that 76.85% of the variation in the net profit can be caused by its interactions with
the counter sales and drive-through sales and the remaining 23.15% are caused by other
factors which were not covered in this study.
SUMMARY OUTPUT

Regression Statistics
Multiple R 0.8766354835
R Square 0.7684897709
Adjusted R Square 0.7023439911
Standard Error 0.2437189164
Observations 10

ANOVA
df SS MS F Significance F
Regression 2 1.38020762846 0.6901038142 11.618122482 0.00597
Residual 7 0.41579237154 0.0593989102
Total 9 1.796

Coefficients Standard Error t Stat P-value Lower 95%

Intercept -0.2209792857 0.266616393976 -0.8288285744 0.4345488156 -0.8514268768
Counter Sales (X1) 0.0863388836 0.044043027034 1.9603303726 0.0907754976 -0.0178063262
Drive-through Sales (X2) 0.1135126086 0.039179180151 2.8972686041 0.0230756608 0.02086856904
 Upper 95% Lower 95.0% Upper 95.0%
0.4094683053 -0.8514268768 0.4094683053
0.1904840934 -0.0178063262 0.1904840934
0.2061566481 0.020868569 0.2061566481