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Compute the simple linear regression coefficients

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A warehouse manager is examining the process distribution to find out the factors that affect warehouse distribution costs. Currently, a small handling fee is added to the order, regardless of the amount of the order. Data have been taken over the past 10 months indicating the warehouse distribution costs and the number of orders received. The results are shown below.

Months

Distribution costs ($)

Number of orders

1

627

312

2

216

376

3

1215

920

4

906

956

5

1016

943

6

753

600

7

591

473

8

378

274

9

463

538

10

974

713
  1. Compute the simple linear regression coefficients, b0 and b1, and state the linear regression model.
  2. In one sentence each, interpret the meaning of b0 and b1 in this problem.
  3. Use the regression equation developed in (b) to predict the monthly distribution warehouse costs when the number of orders is 390.
  4. What is the value of the coefficient of determination (R-square)?

Reference no: EM133076570

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