Please place to be copied. The marketing department for a major manufacturer tra

Question

Please place to be copied.

The marketing department for a major manufacturer tracks sales and advertising expenditures each month. Data from the past nine months appear in the following table Month Sales (units) Advertising cost (S) 95,000 145,000 225,000 160,000 280,000 40000 65000 45000 70000 250,000 55000 7 180,000 50000 130,000 35000 220,000 60000 Intercept and slope of the regression analysis are 9,078 and 3.644 consecutively with a regression coefficient of 0.957. If no money is spent for advertising in month 10, how many units would be sold? [3 points] If S48,000 is spent for advertising in month 11, how many units would be sold? [3 points] To sell 300,000 units, how much should be spent for advertising? [4 points]

Explanation / Answer

Regression equation can be written as Y = 9078+ 3.644X

(i) If no money is spent on advertising, the sales will be Y= 9078 units.

(ii) If $48000 is spent, the sales will be

= 9078+3.644x48000 = 92529

(iii) Equation of X on Y

(X-xbar) = bxy ( Y-Ybar)

(X-48880) = bxy ( Y-187220)

0.957 = (3.644 x bxy)1/2

bxy =( 0.957)2 / 3.644 =0.2513

Now, X - 48880 = 0.2513( Y-187220)

X = 0.2513Y -187220x0.2513 + 48880

X = 0.2513Y +1831.6

X for sales figure of 300000

X= 0.2513x300000+1831.6 = 77221.6

  

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