A business analyst wants to explore the relationship between the sales for a pro
ID: 3200035 • Letter: A
Question
A business analyst wants to explore the relationship between the sales for a product (in thousands of dollars) and the possible factors; price (in dollars) and the promotional expenditure(in hundred of dollars). Results of the partial multiple regression analysis are presented below.
Regression Analysis: Sales versus Price, Promotion
The regression equation is
Sales = 12.9 - 6.50 Price + 0.0207 Promotion
Predictor Coef SE Coef T P
Constant 12.8638 0.2425 53.05 0.000
Price -6.4979 0.3575 -18.18 0.000
Promotion 0.02069 0.03811 0.54 0.611
Analysis of Variance
Source DF SS MS F P
Regression 9.1578 4.5789 0.000
Residual Error 0.1222 0.0244
Total 7 9.2800
At a level of significance = 0.05 ---
Select one:
a. Both price and promotion are not significant
b. Only price is significant
c. Only promotion is significant
d. Both price and promotion are significant
Explanation / Answer
To test the significance of Price and Promotion on sales,
p-value for price=0<0.05
Since p-value=0<0.05, at 5% level of significance,we can conclude that there is significant effect of price on sales.
p-value for promotion=0.611>0.05
Since p-value=0.611>0.05, at 5% level of significance,we can conclude that there is no significant effect of promotion on sales.
ans) b. Only price is significant
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