You work for a company in the marketing department. Your manager has tasked you

Question

You work for a company in the marketing department. Your manager has tasked you with forecasting sales by month for the next year. You notice that over the past 12 months sales have consistently gone up in a linear fashion, so you decide to run a regression the company's sales history. You find that the regression equation for the data is (sales) = 92.676*(time) + 133.472. In August (time = 8) you see the actual sales quantity was 379.164. The residual is -495.716. Interpret this residual in terms of the problem.

Question 24 options:

1)

2)

3)

4)

5)

1)

The sales is 379.164 units less than than what we would expect.

2)

The month is 495.716 months less than than what we would expect.

3)

The month is 495.716 months larger than than what we would expect.

4)

The sales is 495.716 units less than than what we would expect.

5)

The sales is 495.716 units greater than than what we would expect.

Explanation / Answer

(sales) = 92.676*(time) + 133.472

thus residual is given as -495.716 which is defined as y-ypred

thus The sales is 495.716 units less than than what we would expect. or option 4

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