Question: A consumer products company wants to measure the effectiveness of different types of advertising media in the promotion of its products. Specifically, the company is interested in the effectiveness of radio advertising and newspaper advertising (including the cost of discount coupons). A sample of 22 cities with approximately equal populations is selected for study during a test period of one month. Each city is allocated a specific expenditure level both for radio advertising and for newspaper advertising. The sales of the product (in thousand of dollars) also the levels of media expenditure (in thousands of dollars) during the test month are recorded.

Radio Newspaper

Sales Advertising Advertising

City ($000) ($000) ($000)

1 973 0 40

2 1,119 0 40

3 875 25 25

4 625 25 25

5 910 30 30

6 971 30 30

7 931 35 35

8 1,177 35 35

9 882 40 25

10 982 40 25

11 1,628 45 45

12 1,577 45 45

13 1,044 50 0

14 914 50 0

15 1,329 55 25

16 1,330 55 25

17 1,405 60 30

18 1,436 60 30

19 1,521 65 35

20 1,741 65 35

21 1,866 70 40

22 1,717 70 40

Use EXCEL

a) Which statistic did you use?

b) Is your statistic able to predict sales? If so, how well?

c) Predict sales for a city in which radio advertising is $20000, and newspaper advertising is $ 20000?

d) Explain your results?