You work for Segway in the sales division of the S1. You\'ve collected data mont

Question

You work for Segway in the sales division of the S1. You've collected data monthly sales(s) and the price of the One S1(P), both in dollars as well as the daily average summer temperature in your most popular market (T) in degrees Fahrenheit. You estimate the following regression mode like: S=a+by+cT. In your regression, you usually look for a 10% or better level of confidence.
A) what signs do you expect for a,b, and c ? B)your regression yield the following results(attached picture), interpret what these coefficients mean for a,b and c C)does the price have a statistically significant effect on sales? D)does average temp have a statistically significant effect on sales? E) what portion of the total variation in sales remains unexplained? F) company is considering selling our our most popular unit in a new city, where the average is 65 for the price of $570. What level of sales would you expect in this new city? 3. You work for Segway, in the sales division of the One S1 (which is basically a motorized unicycle without the seat). You've collected data on monthly sales (S) and the price of the One S1 (P), both in dollars, as well as the daily average summer temperature in your most popular market (T) in degrees Fahrenheit. You estimate the following regression model: S a + CT. In your regressions, you usually look for a 10%-or-better level of confidence. a. What signs do you expect for a, b, and c? b. Your regression yields the following results: Adjusted R Square 0.733 Independent Variables Coefficients Standard Error tStat Pvalue 4980 10.275 0.00015 8.42 4.573 0.00598 32.56 0.893 0.41285 51165 38.50 29.07 Intercept c. d. e. f. Interpret what these coefficients mean. Does price have a statistically significant effect on sales? Does average temperature have a statistically significant effect on sales? What portion of the total variation in sales remains unexplained? Our company is considering selling our most popular unit in a new city, where the average daily summer temperature is 65°, for a price of $570. What level of sales would you expect in this new city (rounded to the nearest dollar)?

Explanation / Answer

a. The expected sign of a is positive, b is negative as lower the price higher will be the sale and c is positive because as a sunny day will attract more people.

b. The intercept is 51165. This implies if 'b' and 'c' are not significant then the mothly sale will be equal to $51165. The coefficient of P is 'b' = -38.50. This implies that 1 unit increase in P will decreases the monthly sale by $38.50. The coefficient of T is c = 29.07. This implies that 1 unit increase in T will increase the monthly sale by $29.07.

c. Since the p-value is less than 0.05, this implies that the coefficient 'b' is statistically significantly different from 0. This implies that price has statistically significant effect on monthly sale.

d. Since the p-value is more than 0.05, this implies that the coefficient 'c' is not statistically significantly different from 0 and hence temperature does not have statistically significant effect on monthly sale.

e. According to the adj R square, the model explains 73.3% of variation in Y (monthly sale). There is still 26.7% variation remains to be explained.

f. The model is given as follows:

Monthly sale = 51165 - 38.50*Price + 29.07*Temperature

Therefore, with temperature of 650 F and price of $570 the monthly expenses is 11565 - 38.50*570 + 29.07*65 = -8490.45.

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