Question: Sales Forecasts

A manufacturing company is interested in knowing how the sales for a specific product are affected by advertising expenditures. Ten months were selected at random (from internal database of monthly data) and the advertising expenditures and sales volumes for the product were recorded for each month. The data are given in the Excel file Advertising-Sales.xls.

1. Graph the data in a scatterplot, letting Y = sales volume and X = advertising expenditure.
2. Compute the least squares line of regression relating sales volume (Y) to advertising expenditure (X).
3. Use the line of regression to forecast the sales volume for a month where the advertising expenditures equaled $15,000. (Hint: use X = 1.5 since the data is given in units of $10,000s.)
4. At the 5% level of significance, is there a statistically significant linear relationship between advertising expenditure and sales volume? Briefly explain how you determined your answer.

Price: $2.99

Solution: The downloadable solution consists of 4 pages
Deliverable: Word Document