Mechanics and Techniques Problems
10.1. Suppose you have a data file with one response variable, Wait Time, that measures the time
for an order to be delivered to a customer at Beef ’n Buns. The data includes the following
explanatory variables:
- Time: M(orning), D(ay), E(vening)
- Cost: Price of the order, in dollars
- Venue: C(ounter), D(rive-through window)
- Drinks: number of drinks included in the order
List all the possible interaction terms that could be created from two different variables. Organize your
list by which base variables were used to construct each.
10.2. Bring up the data file C10 Laptops.xls [.rda].
- Change the variable names ”Manufacturer” to ”Manu” so that interaction terms will
be short and still meaningful.
- Form dummy variables for the categorical variable Manu.
- Create interaction terms for Manu*Wt
10.3. Using the modified data file from the previous problem, construct a multiple
regression routine with Price as the dependent variable, using the following explanatory
variables:
- The numerical variable Weight
- The dummy variables for the categorical variables Manu
- The dummy variables for the interaction terms for Manu*Wt
- Let Sony be the reference category for Manu, if your software allows you to select the
reference category. Reminder: this choice of reference category for Manu automatically
determines the reference category for Manu*Wt.
Explain your model by breaking it apart into one model equation for each possible combination of
factors.