Management of a Home Depot store wants to understand the growth pattern of the m

Question

Management of a Home Depot store wants to understand the growth pattern of the monthly sales of its washing machines over the past two years. The managers have recorded the relevant data in the attached Excel file.

Has the sales of this product been growing linearly over these months? Using simple linear regression, explain why or why not?

Month Washing Machines sold 1 723 2 856 3 930 4 1182 5 1209 6 1756 7 2000 8 2212 9 2366 10 2645 11 2872 12 2937 13 3136 14 3241 15 3345 16 3524 17 3542 18 3612 19 3547 20 3376 21 3375 22 3403 23 3697 24 3495

Explanation / Answer

Output of regression analysis in excel is

The regression equaltion is

ycap = 960.69 + 133.08x

from the above equation, it is evident that sales of this product been growing linearly over these months. Because the slope of the line is positive i.e. 133.08

Also the value of r i.e. correlation coefficient is 0.9306 which indicates that positive correlation with higher magnitude exits between sales of this product and months.

SUMMARY OUTPUT Regression Statistics Multiple R 0.930573044 R Square 0.86596619 Adjusted R Square 0.859873745 Standard Error 378.5396194 Observations 24 ANOVA df SS MS F Significance F Regression 1 20367228.6 20367228.6 142.1376908 4.50445E-11 Residual 22 3152429.356 143292.2435 Total 23 23519657.96 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0% Intercept 960.692029 159.4978525 6.023228612 4.61651E-06 629.9137282 1291.47033 629.9137282 1291.47033 Month 133.0813043 11.16252439 11.92215127 4.50445E-11 109.9316456 156.2309631 109.9316456 156.2309631

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.