Cincinnati Paint Company sells quality brands of paints through hardware stores throughout the United States. The company maintains a large sales force whose job it is to call on existing customers as well as look for new business. The national sales manager is investigating the relationship between the number of sales calls made and the miles driven by the sales representative. Also, do the sales representatives who drive the most miles and make the most calls necessarily earn the most in sales commissions? To investigate, the vice president of sales selected a sample of 25 sales representatives and determined: |
| • The amount earned in commissions last month (Y) | | • The number of miles driven last month (X2) | | • The number of sales calls made last month (X1) |
| The information is reported below. |
Commissions
($000) | Calls | Driven | Commissions
($000) | Calls | Driven | | 33 | 143 | 2,286 | 24 | 116 | 3,221 | | 20 | 144 | 2,161 | 21 | 118 | 3,032 | | 26 | 145 | 2,651 | 46 | 125 | 2,073 | | 22 | 156 | 3,272 | 42 | 147 | 2,725 | | 28 | 158 | 2,208 | 34 | 154 | 3,123 | | 31 | 163 | 3,393 | 32 | 158 | 2,233 | | 29 | 167 | 3,038 | 49 | 167 | 2,770 | | 32 | 114 | 3,281 | 44 | 186 | 2,599 | | 28 | 117 | 2,771 | 40 | 198 | 2,895 | | 19 | 146 | 2,568 | 32 | 136 | 2,592 | | 22 | 184 | 2,055 | 30 | 124 | 2,931 | | 27 | 145 | 2,137 | 47 | 105 | 2,767 | | 29 | 104 | 3,378 | | | |
Click here for the Excel Data File Develop a regression equation including an interaction term. (Round your answers to 5decimal places. Negative amounts should be indicated by a minus sign.) |
| Commissions = + Calls + Miles + X1X2 |
Complete the following table. (Round your answers for Coef, SE Coef to 5 decimal places, T to 2 decimal places and P to 3 decimal places. Negative amounts should be indicated by a minus sign.) |
| Predictor | Coef | SE Coef | T | P | | Constant | | | | | | Calls | | | | | | Miles | | | | | | X1X2 | | | | |
Compute the value of the test statistic corresponding to the interaction term. (Round your answer to 2 decimal places. Negative amount should be indicated by a minus sign.) |
| Value of the test statistic | |
At the .05 significance level is there a significant interaction between the number of sales calls and the miles driven? |
| This is (Click to select)significantnot significant, so we conclude there (Click to select)is no interactionis interaction. |
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Solution: ECON 3406 Cincinnati Paint Company sells quality brands