Description of linear regression and correlation

Reference no: EM1397281

A suburban hotel derives its gross income from its hotel and restaurant operations. The owners are interested in the relationship between the number of rooms occupied on a nightly basis and the revenue per day in the restaurant. Below is a sample of 25 days (Monday through Thursday) from last year showing the restaurant income and number of rooms occupied.

Day Income Occupied

1 $1,452 23

2 1,361 47

3 1,426 21

4 1,470 39

5 1,456 37

6 1,430 29

7 1,354 23

8 1,442 44

9 1,394 45

10 1,459 16

11 1,399 30

12 1,458 42

13 1,537 54

14 $1,425 27

15 1,445 34

16 1,439 15

17 1,348 19

18 1,450 38

19 1,431 44

20 1,446 47

21 1,485 43

22 1,405 38

23 1,461 51

24 1,490 61

25 1,426 39

a) Does the breakfast revenue seem to increase as the number of occupied rooms increases? Draw a scatter diagram to support your conclusion.

b) Determine the coefficient of correlation between the two variables. Interpret the value.

d) What percent of the variation in revenue in the restaurant is accounted for by the number of rooms occupied?

Reference no: EM1397281

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