1. LiveRight Company, which sells medical supplies to health care providers revi

Question

1. LiveRight Company, which sells medical supplies to health care providers reviewing its new bonus program. The program provides bonuses to salespeople based on LiveRight management wants to know whether bonuses paid in 2015 had an effect on 2016 sales. You have a rand sample of 50 of the company's sales territories containing the following information from each territory: ADV-Amount spent on advertising in 2016 (in thousands) BONUS-Total amount of bonuses paid in 2015 (in thousands) RELPRICE-Live Right's average price relative to the industry average. COMPET-Largest competitor's sales (in thousands) SALES-LiveRight's sales in 2016 (in thousands) The partial Excel results are shown below: SSR Regression Sum of Squares 1,237,904 MS Residual 24,665 ANOVA F significance df MS 0.0001 Regression Residual Total Coefficients Std Error t-stat -value Intercept 889.1 162.1 0.0001 0.0001 10.8 1.8 ADV BONUS 1 1.6 3.02 0.000 RELPRICE -122 71.65 0.0955 COMPET -0.18 0.15 0.2364 a) Complete the ANOVA table with the nine missing values. b) Find R2. What does this number tell you about the regression model? d D2 h ann nun Inin and his

Explanation / Answer

a) ANOVA df SS MS F Significance F Regression 4 1237904 309476 12.54717211 0.0001 Residual 45 1109925 24665 Total 49 2347829 b) r^2=SSR/SST 0.527254753 c) r^2 of 1 indicates perfect fit for the data d) Looking at the p-values in the table, ADV and BONUS are significant e) Yes it is

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