A backward stepwise regression solu

A backward stepwise regression solution was performed on the four independent variables. Stock availability per
distributor had a stable coefficient of 2.777s and a t-value of 9.786. It was therefore, the only independent variable
that was significant in determining the customer value.
That is; Y = +726.46 + 2.777 X


where Y= Sales in cases , X
Stock availability in cases, and ε= error
term Hence to increase customer value by one case of sales, management needs to increase distributor stock
availability by about 2.777 cases. The correlation between stock availability and sales is R=0.726. The results mean
that 53 per cent of the variance (R-square) of sales has been significantly explained by only one independent
variable, stock availability, X.

The positive beta weight indicates that if sales are to be increased, it is necessary to
increase stock availability. As a result the hypothesis that the independent variables order cycle time, delivery speed,
stocks availability and stock out frequency will significantly describe the impact of distribution strategy on customer
value was rejected because only one variable, stock availability, significantly described the variance.