Question

Connie Jefferson is the primary flower dealer in her hometown of San Flores. Connie has watched the sales volume of her favorite flower, the yellow rose, change over the past 10 weeks. The changes are due to an experiment that Connie is conducting. She has been told that she could sell more roses by reducing the price, and Connie tends to agree. In her experiment, Connie has set out to determine the relationship between the price charged for yellow roses and the quantity demanded. Over the past 10 weeks, Connie has carefully tracked the selling price of her roses and the quantity sold. Her data are as follows:

Week	Price	Quantity Sold
1	$30	50
2	8	270
3	10	240
4	27	90
5	25	110
6	21	130
7	12	200
8	15	190
9	19	160
10	20	150

            a.         Develop a least squares regression equation that shows the relationship between the    

quantity of roses sold and the price charged.

            b.         If Connie sets the price at $17, what should be the demand for her roses?

            c.          Discuss the use of this modeling process in a different business setting.

*Please show working and please use the different answer from the chegg since my friends already use it. Handwriting is okay, thankyou and I appreciate it.

Answer 1

c. Regression model can help in analyzing the marketing effectiveness and sales promotions of a product. The model can analyze the effect of sales of a particular product on its complimentary product and also on its subtitute products. It can capture the sales promoton effect on a product and its complimentary and substitute products by controlling other factors influencing sales.

The model can also be used in assessing risk in insurance services such as claims per customer against age and capture the age range which is more prone to make claims. This analysis can help an insurance company to decide the premiums to be paid by different age groups.