Simple Linear Regression And Independent And Dependent Variables

You are the CEO of Big Grocery. Your company is planning on expanding into new markets. You are expected to make decisions on things such as store size, location and management. You want to decide how large of a store you want to build but also need to analyze how large of a store should build.To be able to do this, revenue per square foot should be estimated.

What you would like to have as a manager is data on revenue and data on square foot for each store. Please estimate the revenue per square foot.


1.State the relationship to be analyzed and define the independent and dependent variables?

2.Perform the simple linear regression based on the data?

3.Discuss the analysis in terms of;

Linear in Parameters

Random Sampling

Sample variation in the independent variable

Zero mean of the error term conditional on the independent variable

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