In: Statistics and Probability
A chain store corporation wants study the effects of price decrease (x1, in %) and advertising expenditure increase (x2) on sales volume (y). The corporation imposes different levels of price decrease and advertising expenditure increase on its product in stores in eight different districts of the country and measures the changes in sales volume over the next three months. A multiple regression model is used and the following output is extracted from the computer software.
ANOVA
df | SS | MS | F | |
Regression | ? | ? | ? | ? |
Residual | ? | ? | ? | |
Total | ? | ? |
Coefficients | Standard Error | |||
Intercept | 0.1285 | 0.9018 | ||
x1 | 0.0471 | 0.1213 | ||
x2 | 0.4141 | 0.1742 | ||
i. Write down the fitted multiple linear regression equation. [1 mark]
ii. Complete the above ANOVA table for the multiple linear regr P ession if y = 42, Py 2 = 256 and only 7.66% of variation in sales volume cannot be explained by price decrease and advertising expenditure. [3 marks]
iii. Test the overall significance of the fitted equation in part i. at 1% level of significance. [3 marks]
iv. Test the significance of price decrease in affecting the sales volume at 1% level of significance