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Mini Case 1 using Excel: Data Tables for the Walsh borne Extended-Stay Hotel

The weekly price at the Walsh borne Extended-Stay Hotel (renting by the week for business travelers) is $950. Operating costs average $20,000 per week, regardless of the number of rooms rented. On a new worksheet in the Midterm Exam workbook, construct a spreadsheet model to determine the profit if 40 rooms are rented. The manager has observed that the number of rooms rented during any given week varies between 32 and 50 (the total number of rooms available).

a. Use a one-way data table to evaluate the profit for this range of unit rentals.

b. Suppose the manager is considering lowering or increasing the weekly price by $100. How will profit be affected? Create a new two-way data table to account for this change.

Mini-Case 2 using Excel: Regression Analysis at Medex Medical School

A recent ten-year study conducted by a research team at the Medex Medical School assessed how age, systolic blood pressure, and smoking relate to the risk of strokes. (If the blood pressure is 120/90, the systolic blood pressure is the top number). Assume that the data in the Health Data spreadsheet are from a portion of this study. Risk is interpreted as the probability (times 100) that the patient will have a stroke over the next ten-year period. For the smoking variable, define a dummy variable of 1 (indicating a smoker) and 0 (indicating a non-smoker). Complete the following:

a. Create a correlation matrix to assess for correlation and multicollinearity. Comment on this sheet whether multicollinearity exists between the independent variables. Also cite which independent variable is the most correlated to the risk of having a stroke.

b. Develop an estimated multiple linear regression equation that relates risk of a stroke to the person’s age, systolic blood pressure, and whether the person is a smoker. (Assume a linear model, not a curvilinear model, for this mini-case.)

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