Operations Management
John478
Question
Chicken Palace periodically offers carryout five-piece chicken dinners at special prices. Let Y be the number of dinners sold and X be the price.
Price | Dinners sold |
$3 | 760 |
$3.5 | 510 |
$2 | 980 |
$4 | 400 |
$4.5 | 320 |
$5 | 300 |
- a)Based on the historical observations in the above table, determine the regression equation.
- b)What is the model’s correlation coefficient? Comment on the strength of the relationship between the price and the number of dinners.
- c)Apply a 10% increase to the price point of $4.5 and calculate the predicted number of dinners sold at this new price. Compare this predicted sale with the current sale for the $4.5 price point and interpret the impact of this specific price increase on sales.
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