Operations Management: Processes and Supply Chains, 12th Edition

Solved Problem 1

1. 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. Based on the historical observations and calculations in the following table, determine the regression equation, correlation coefficient, and coefficient of determination. How many dinners can Chicken Palace expect to sell at $3.00 each?

   Observation	Price (X)	Dinners Sold (Y)
   1	$2.70	760
   2	$3.50	510
   3	$2.00	980
   4	$4.20	250
   5	$3.10	320
   6	$4.05	480
   Total	$19.55	3,300
   Average	$3.258	550

Solution

1. We use the computer (Regression Analysis Solver of OM Explorer or Regression Projector module of POM for Windows) to calculate the best values of a, b, the correlation ...