A mail-order catalog business maintains a warehouse for distribution of products ordered. Management is currently investigating what factors affect distribution costs. Data has been collected for the past 24 months indicating warehouse distribution costs, sales, numbers of orders and average order processing time.
1. Perform regression analysis to determine how the three variables affect distribution costs. Show the final model and the work needed to reach this result. Use Alpha = .01
2. Interpret the coefficients of the variables in the final model.
3. Would you use this model? Why or why not?
4. Given: Sales = $475,000, number of orders = 4000, average processing time = 25 minutes, calculate predicted distribution costs.