Answer: The manager should include 7 independent variables in her multiple regression analysis .
Explanation:
Given : The manager wants to forecast annual sales revenues of snekers of different categories.
The given categories are :-
Sports , color , gender.
Also when we have a categorical variable that assumes n different divisions then the number of dummy explanatory variable for multiple regression will be n-1.
Number of types of sports = 3
⇒ Number of dummy variables for types of sports = 3-1 =2
Number of types of color = 5
⇒ Number of dummy variables for types of color = 5-1 =4
Number of types of gender = 2
⇒ Number of dummy variables for gender = 2-1 =1
Now, the total number of independent variables =
Hence, the manager should include 7 independent variables in her multiple regression analysis .