Respond to the following in a minimum of 175 words: Models help us describe and summarize relationships between variables. Understanding how process variables relate to each other helps businesses...

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Respond to the following in a minimum of 175 words:


Models help us describe and summarize relationships between variables. Understanding how process variables relate to each other helps businesses predict and improve performance. For example, a marketing manager might be interested in modeling the relationship between advertisement expenditures and sales revenues.


Consider the dataset below and respond to the questions that follow:


Advertisement ($'000)Sales ($'000)

XXXXXXXXXX

XXXXXXXXXX

7673290

8854113

XXXXXXXXXX

XXXXXXXXXX

8924414

9385506

7693346

6773673

XXXXXXXXXX

XXXXXXXXXX


  • Construct a scatter plot with this data.
  • Do you observe a relationship between both variables?
  • Use Excel to fit a linear regression line to the data. What is the fitted regression model? (Hint: You can follow the steps outlined on page 497 of the textbook.)
  • What is the slope? What does the slope tell us?Is the slope significant?
  • What is the intercept? Is it meaningful?
  • What is the value of the regression coefficient,r? What is the value of the coefficient of determination, r^2? What does r^2 tell us?
  • Use the model to predict sales and the business spends $950,000 in advertisement. Does the model underestimate or overestimates ales?
Answered Same DayMay 10, 2021

Solution

Shakeel Ahmed answered on May 10 2021
20 Votes

Scatter plot between Sales and Advertisement expenses is as follows -
Yes, we observe a linear relationship between Sales...

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