Management of a soft-drink bottling company wants to develop amethod for allocating delivery costs to customers. Although onecost clearly relates to travel times within a particular route,another variable cost reflects the time required to unload thecases of soft drink at the delivery point. A sample of 20deliveries within a territory was selected. The delivery time andthe number of cases delivered were recorded. Develop a regressionmodel to predict delivery time based on the number of casesdelivered. a) Use the least-square method to calculate theregression coefficients, b0 and b1. Write your regression equation.b) Interpret the meaning of b0 and b1 in this problem. c) Predictthe delivery time for 150 cases of soft drink. d) Would it beappropriate to use to model to predict the delivery time for acustomer who is receiving 500 cases of soft drink? Explain why. e)Determine the coefficient of determination, r2, and explain itmeaning in this problem. f) Perform a residual analysis. Is thereany evidence of patterns in the residuals? Explain. g) At the 0.05level of significance, is there evidence of a linear relationshipbetween delivery time and the number of cases delivered? Explain.h) Explain how the results in a to g can help allocate deliverycosts to customers.
