Question

In: Statistics and Probability

Wal-Mart is the second largest retailer in the world. The data file (WalMart_revenue.xlsx) is included in...

Wal-Mart is the second largest retailer in the world. The data file (WalMart_revenue.xlsx) is included in the Excel data zip file in week one, and it holds monthly data on Wal-Mart’s revenue, along with several possibly related economic variables. Develop a linear regression model to predict Wal-Mart revenue, using CPI as the only (a) independent variable. (b) Develop a linear regression model to predict Wal-Mart revenue, using Personal Consumption as the only independent variable. (c) Develop a linear regression model to predict Wal-Mart revenue, using Retail Sales Index as the only independent variable. (d) Which of these three models is the best? Use R-square value, Significance F values and other appropriate criteria to explain your answer. Identify and remove the four cases corresponding to December revenue. (e) Develop a linear regression model to predict Wal-Mart revenue, using CPI as the only independent variable. (f) Develop a linear regression model to predict Wal-Mart revenue, using Personal Consumption as the only independent variable. (g) Develop a linear regression model to predict Wal-Mart revenue, using Retail Sales Index as the only independent variable. (h) Which of these three models is the best? Use R-square values and Significance F values to explain your answer. (i) Comparing the results of parts (d) and (h), which of these two models is better? Use R-square values, Significance F values and other appropriate criteria to explain your answer. Please use one Excel file to complete this problem, and use one sheet for one sub-problem. Use a Microsoft Word document to answer questions. Finally, upload the files to the submission link for grading.

Date

Wal Mart Revenue

CPI

Personal Consumption

Retail Sales Index

December

11/28/03

14.764

552.7

7868495

301337

0

12/30/03

23.106

552.1

7885264

357704

1

1/30/04

12.131

554.9

7977730

281463

0

2/27/04

13.628

557.9

8005878

282445

0

3/31/04

16.722

561.5

8070480

319107

0

4/29/04

13.98

563.2

8086579

315278

0

5/28/04

14.388

566.4

8196516

328499

0

6/30/04

18.111

568.2

8161271

321151

0

7/27/04

13.764

567.5

8235349

328025

0

8/27/04

14.296

567.6

8246121

326280

0

9/30/04

17.169

568.7

8313670

313444

0

10/29/04

13.915

571.9

8371605

319639

0

11/29/04

15.739

572.2

8410820

324067

0

12/31/04

26.177

570.1

8462026

386918

1

1/21/05

13.17

571.2

8469443

293027

0

2/24/05

15.139

574.5

8520687

294892

0

3/30/05

18.683

579

8568959

338969

0

4/29/05

14.829

582.9

8654352

335626

0

5/25/05

15.697

582.4

8644646

345400

0

6/28/05

20.23

582.6

8724753

351068

0

7/28/05

15.26

585.2

8833907

351887

0

8/26/05

15.709

588.2

8825450

355897

0

9/30/05

18.618

595.4

8882536

333652

0

10/31/05

15.397

596.7

8911627

336662

0

11/28/05

17.384

592

8916377

344441

0

12/30/05

27.92

589.4

8955472

406510

1

1/27/06

14.555

593.9

9034368

322222

0

2/23/06

18.684

595.2

9079246

318184

0

3/31/06

16.639

598.6

9123848

366989

0

4/28/06

20.17

603.5

9175181

357334

0

5/25/06

16.901

606.5

9238576

380085

0

6/30/06

21.47

607.8

9270505

373279

0

7/28/06

16.542

609.6

9338876

368611

0

8/29/06

16.98

610.9

9352650

382600

0

9/28/06

20.091

607.9

9348494

352686

0

10/20/06

16.583

604.6

9376027

354740

0

11/24/06

18.761

603.6

9410758

363468

0

12/29/06

28.795

604.5

9478531

424946

1

1/26/07

20.473

606.348

9540335

332797

0

Solutions

Expert Solution

Hello Sir/Mam

We are most delighted to answer, but I would request you to please ask atmost 1 question or 4 subparts per posts. Your cooperation is highly appreciated. Thanks!

(a) Linear Regression Model to predict Walmart revenue as CPI as the only independent variable:

y = 1.5834 * x + 556.07
R² = 0.1137

(b) Linear Regression Model to predict Walmart revenue as Personal Consumption as the only independent variable:

y = 0.00004 * x + 273.89
R² = 0.9702

(c) Linear Regression Model to predict Walmart revenue as Retail Sales Index as the only independent variable:

y = 0.0004 * x + 461.49
R² = 0.3969

(d) Using R-Squared Values, it can be concluded that "Personal Consumption" is the best measure to estimate revenue of Walmart as Revenue of Walmart and Personal Consumption are very strongly correlated(R² = 0.9702)(much more than other two measures).

I hope this solves your query.

Do give a thumbs up if you find this helpful.

orchestra answered 3 years ago
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