Question: Allied Trucking Company’s risk manager provided accident data for Allied’s truck fleet that produced the following regression model for accident frequency. The data were on a monthly basis for the last five years. The values in parentheses are p-values. (a) Interpret the results of this model. Be sure to discuss the statistical significance of individual variables and the overall model. (b) If Allied spends an additional $1,000 on training and it has a vehicle fleet of 1,000 trucks, what would be the expected impact on the number of accidents in one month, all else equal?

CLAIMRATE = .076 + .0005(MILES) - .005(TRAIN) + .010(COLD) + .001(SALES), R² = 97.8%

(.0001) (.01) (.0001) (.001) (.967)

CLAIMRATE = number of accidents/number of vehicles

MILES = average miles driven per vehicle in thousands

TRAIN = expenditures on in-service training in thousands ($)

COLD = days in the month with temperatures below 36°F

SALES = company sales in thousands ($)