Fin1131/Fin3154

First Semester, AY 2020-2021

Laboratory Activity 3

ANSWERS:

NUMBER 1

 Null Hypothesis (H0): There is no relationship between delivery time and the number of cases
delivered.
 Alternative Hypothesis (H1): There is a relationship between delivery time and the number of
cases delivered.
(a)

Adjusted R Std. Error of

Model R R Square Square the Estimate
1 .986a .972 .970 1.9865

Sum of
Model Squares df Mean Square F Sig.
1 Regression 2443.466 1 2443.466 619.196 .000b
Residual 71.031 18 3.946
Total 2514.498 19

Unstandardized Standardized
Coefficients Coefficients Collinearity Statistics
Model B Std. Error Beta t Sig. Tolerance VIF
1 (Constant) 24.835 1.054 23.557 .000
Number of Cases .140 .006 .986 24.884 .000 1.000 1.000

b0: 24.835

b1: 0.140

(b)
 b0 is the amount of time it will take to produce a delivery consisting of zero cases of beverages.
 b1, for each additional case of beverages, is the anticipated marginal increase in delivery time.
(c)

Y = b0 + b1X1
= 24.835 + 0.140X1
= 24.835 + 0.140(150)
= 45.83 Minutes
(d) No, since there were no orders of more than 300 cases in the data used to construct the model.
(e)
SSE
R2 = 1 -
TSS
71.031
= 1 -
2514.498
= 0.9718

(f)
Kolmogorov-Smirnova Shapiro-Wilk
Statistic df Sig. Statistic df Sig.
Standardized Residual .181 20 .086 .906 20 .054

There is no obvious pattern to the residuals, based on visual inspection.

t (n−k −1 , α /2 )=t (18 , 0 . 025) =2. 101

(g) The critical value of t for this test is . Our t is:
β^ 1
t =
s ^β
1

0 .14
=
0 .0056
¿ 25
We can reject the null hypothesis and conclude that there is a relationship between delivery
time and the number of cases delivered.
NUMBER 2

Adjusted R Std. Error of

Model R R Square Square the Estimate
a
1 .899 .809 .789 158.904

Sum of
Model Squares df Mean Square F Sig.
1 Regression 2028032.690 2 1014016.345 40.158 .000b
Residual 479759.901 19 25250.521
Total 2507792.591 21

Standardized
Unstandardized Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) 156.430 126.758 1.234 .232
Radio Adverting in 13.081 1.759 .749 7.435 .000
Thousands
Newspaper Advertising in 16.795 2.963 .571 5.668 .000
Thousands

(a) Assess the following assumptions of Multiple Linear Regression, if satisfied or not:
 Collinearity

With the VIF of 1.000 and the Condition Index of below 30, the Collinearity in Linear
Regression has been satisfied.

 Normality

Tests of Normality
Kolmogorov-Smirnova Shapiro-Wilk
Statistic df Sig. Statistic df Sig.
Standardized Residual .077 22 .200* .977 22 .872

There is no Issue in normality so, the Normality is satisfied

  Homoscedasticity

The given scatterplot table, we can observe that patterns of the residual formed a triangular
shaped, so there is an issue on Homoscedasticity

(b) State the multiple regression equation.

Y = 156.43 + 13.081 + 16.795X

0 X1 2

X1, Radio Advertising

X2, Newspaper Advertising

(c) Interpret the meaning of the regression coefficients and decide if each of the independent
variables is significant or not.

For every one-unit increase in Radio/TV advertising, we expect to see a 13.08-unit increase in Sales.

For every one-unit increase in Newspaper advertising, we expect to see a 16.80-unit increase in Sales.

(d) Which type of advertising is more effective? Explain.

In the given data, each increase of $1000 in radio ads is expected to result in a $13,081 increase
in revenue for a given amount of newspaper advertising. Each increase of $1000 in newspaper ads is
expected to result in a $16,795 increase in revenue for a given amount of radio advertising. Since the
slope of newspaper advertisements is higher than that of radio advertisements, newspaper
advertisements are more effective.