Determine coefficient of correlation

Reference no: EM1314089

A suburban hotel derives its gross income from its hotel and restaurant operations. The owners are interested in the relationship between the number of rooms occupied on a nightly basis and the revenue per day in the restaurant. Below is a sample of 25 days (Monday through Thursday) from last year showing the restaurant income and number of rooms occupied?

Day	Income	Occupied	Day	Income	Occupied
1	$1,452	2S	14	$1,425	27
2	1.361	47	15	1.445	34
3	1.426	21	16	1.439	15
4	1.47	39	17	1,348	19
5	1.456	37	18	1.45	36
6	1.43	29	19	1.431	44
7	1,354	23	20	1.446	47
8	1.442	44	21	1.485	43
9	1.394	45	22	1.405	38
10	1.459	16	23	1.461	51
11	1,399	30	24	1,490	61
12	1,458	42	25	1.426	39
13	1.537	54

Use a statistical software package to answer the following questions.

a) Does the breakfast revenue seem to increase as the number of occupied rooms increases? Draw a scatter diagram to support your conclusion.

b) Determine the coefficient of correlation between the two variables. Interpret the value.

c) Is it reasonable to conclude that there is a positive relationship between revenue and occupied rooms? Use the .10 significance level.

d) What percent of the variation in revenue in the restaurant is accounted for by the number of rooms occupied?

Reference no: EM1314089

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