Dixie Showtime Movie Theaters, Inc., owns and operates a chain of cinemas in sev
ID: 3061923 • Letter: D
Question
Dixie Showtime Movie Theaters, Inc., owns and operates a chain of cinemas in several markets in the southern U.S. The owners would like to estimate weekly gross revenue as a function of advertising expenditures. Data for a sample of eight markets for a recent week follow.
Problem 7-9 Dixie Showtime Movie Theaters, Inc., owns and operates a chain of cinemas in several markets in the southern U.S. The owners would like to estimate weekly gross revenue as a function of advertising expenditures. Data for a sample of eight markets for a recent week follow Click on the datafile logo to reference the data DATA Weekly Gross Revenue Television Advertising ($100s) Newspaper Advertising ($100s) Market ($100s) 101.3 51.9 74.8 126.2 137.8 101.4 237.8 219.6 5.0 3.0 4.0 4.3 3.6 3.5 5.0 6.9 Mobile 1.5 3.0 Jackson Birmingham Little Rock Biloxi New Orleans Baton Rouge 4.3 4.0 2.3 8.4 5.8 (a) Use the data to develop an estimated regression with the amount of television advertising as the independent variable. Let x represent the amount of television advertising. If required, round your answers to three decimal places. For subtractive or negative numbers use a minus sign even if there is a sign before the blank. (Example: -300) Test for a significant relationship between television advertising and weekly gross revenue at the 0.05 level of significance. What is the interpretation of this relationship? The input in the box below will not be graded, but may be reviewed and considered by your instructor. (b) How much of the variation in the sample values of weekly gross revenue does the model in part (a) explain? If required, round your answer to two decimal places. (c) Use the data to develop an estimated regression equation with both television advertising and newspaper advertising as the independent variables Let x1 represent the amount of television advertising Let x2 represent the amount of newspaper advertising. If required, round your answers to three decimal places. For subtractive or negative numbers use a minus sign even if there is a sign before the blank. (Example: -300) X1 + 12Explanation / Answer
The regression equation is
Revenue = - 62.6 + 41.1 Telivision
Predictor Coef SE Coef T P
Constant -62.64 85.84 -0.73 0.493
Telivision 41.13 18.83 2.18 0.072
S = 61.1453 R-Sq = 44.3% R-Sq(adj) = 35.0%
a)
Y^ = - 62.64 + 41.13 X
The estimated p-value of the slope of Television advertising is 0.072. Hence, we can not reject the null hypothesis and conclude that television advertisement does not signinificant effect on gross revenue at 0.05 level of significance.
b) 44.30%
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The regression equation is
Revenue = - 60.0 + 25.1 Telivision + 17.7 Newspaper
Predictor Coef SE Coef T P
Constant -60.04 71.55 -0.84 0.440
Telivision 25.12 17.79 1.41 0.217
Newspaper 17.674 9.266 1.91 0.115
S = 50.9607 R-Sq = 67.8% R-Sq(adj) = 54.9%
Y^ = - 60.04 + 25.12 X1 + 17.774 X2
The estimated p-values of television and newspaper advertisementa re 0.217 and 0.115 respectively. Hence, both the advertisement do not have significant effect on gross revenue at 0.05 level of significance.
d) Ans: 67.80%
e) Ans: The nex step is to check the assumptions of the models.
f) The managerial implication from the result is that the advertising does not affect gross revenue.
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