Question

A shoe manufacturer is considering developing a new brand of running shoes. The business problem facing the marketing analyst is to determine which variables should be used to predict durability (i.e., the effect of long-term impact). Two independent variables under consideration are X₁ (FOREIMP), a measurement of the forefoot shock-absorbing capability, and X₂ (MIDSOLE), a measurement of the change in impact properties over time. The dependent variable Y is LTIMP, a measure of the shoe's durability after a repeated impact test. Data are collected from a random sample of 15 types of currently manufactured running shoes, with the following results:

Variable	Coefficients	Standard Error	t Statistic	p-Value
Intercept	-0.02686	0.06905	-0.39	0.7034
FOREIMP	0.79116	0.06295	12.57	0.0000
MIDSOLE	0.60484	0.07174	8.43	0.0000

A) State the regression equation.

B) Interpret the meaning of the slopes, b₁ and b₂, in this problem.

C) What conclusions can you reach concerning durability?

Please show all work.

Answer 1