Econ

ECON.222.C02 Stat, DA & Mod for Bus Econ II (2018 FALL)

Please refer to the Anova and Simple Regression Projects.

Your company would like you to complete their sales prediction model. They would like you to ascertain if the other variables for which they have data also affect sales. A complete model will have to include advertising expenditures and package design along with the other variables listed above.

1. Create three dummy variables named DA, DB, and DC to capture the effects of the four levels of the categorical variable. Then use Tools > Data Analysis > Regression, to fit a regression of Sales as a function of all the variables in your data set (variables 3 through 7 above), plus the three dummies DA, DB, and DC. 

2. Conduct the F-test for model significance and report your results. 

3. Does your model appear to be adequate for the purpose intended? (Refer to goodness-of-fit measures, in particular, R², adjusted R², and the standard error of estimate.) 

4. Your boss wants to know what you predict will be the effect on company sales if the company increases its price. What will be your response? 

5. Do changes in your competitor's price have a significant impact on your company's sales and, if so, at what significance level? 

6. Are any of the other variables in your model significant in determining sales at the 5% significance level or better? 

7. Your boss also wants to know about the effectiveness of the various advertising methods. Report your findings with regard to this variable.