Use the estimated regression equation of the reduced model to predict the operating margin of a new La Quinta motel with 3 thousands motel and hotel rooms within three miles, with 50 thousand square meters of office space in the surrounding community, with a 65 thousand dollars median household income in the surrounding community and a distance of 6 miles from the downtown core.
Use the estimated regression equation of the reduced model to predict the operating margin of a new La Quinta motel with 3 thousands motel and hotel rooms within three miles, with 50 thousand square meters of office space in the surrounding community, with a 65 thousand dollars median household income in the surrounding community and a distance of 6 miles from the downtown core.
Use the estimated regression equation of the reduced model to predict the operating margin of a new La Quinta motel with 3 thousands motel and hotel rooms within three miles, with 50 thousand square meters of office space in the surrounding community, with a 65 thousand dollars median household income in the surrounding community and a distance of 6 miles from the downtown core.
La Quinta is a moderately priced chain of motels in the USA. Its market is frequent business travelers. The chain recently launched a campaign to increase maket share by building new motels. Operating margin is the ratio of the sum of profit, depeciation and interest expenses divided by total revenue. Thus operating margin is measured in percent units and the higher the operating margin the bigger the success of the motel. Let Y be the operating margin of a La Quinta motel. Let x1 be the number (in thousands) of total motel and hotel rooms within three miles. Let x2 be the office space (in thousand square meters) in the surrounding community. Let x3 be the median household income in the surrounding community (in thousands dollars). Let x4 be the distance (in miles) from the downtown core. The management acquired data on 40 randomly selected La Quinta motels. The sample measurements, x1, x2, x3, x4 and y are given below. A multiple regression model with Y as the dependent variable and x1, x2, x3, x4 as the independent variables was applied to these data.
Transcribed Image Text:Use the estimated regression equation of the reduced model to predict the operating margin of a new La
Quinta motel with 3 thousands motel and hotel rooms within three miles, with 50 thousand square meters
of office space in the surrounding community, with a 65 thousand dollars median household income in
the surrounding community and a distance of 6 miles from the downtown core.
Definition Definition Middle value of a data set. The median divides a data set into two halves, and it also called the 50th percentile. The median is much less affected by outliers and skewed data than the mean. If the number of elements in a dataset is odd, then the middlemost element of the data arranged in ascending or descending order is the median. If the number of elements in the dataset is even, the average of the two central elements of the arranged data is the median of the set. For example, if a dataset has five items—12, 13, 21, 27, 31—the median is the third item in ascending order, or 21. If a dataset has six items—12, 13, 21, 27, 31, 33—the median is the average of the third (21) and fourth (27) items. It is calculated as follows: (21 + 27) / 2 = 24.
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