explain how linear regression could be used in business decision making?

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Expert Solution

Linear regression model is used for causal analysis. This means that it is used to relate one variable on the other. In this case, there isn’t much avenue where a grocery store can use regression analysis. However, they could use the daily data to create a model where they can predict the demand for products.

For example, the general idea is that during the beginning of a month and the first weekends usually see a spike in number of customers. This is because people tend to do grocery shopping for the month on the first weekend when they get their paycheck. Thus the footfall is higher. However, this is just an assumption.

A grocery store can use the daily sales data on two independent variable called the date and the day of the week. These two factors’ influence on the sales could provide the grocery store to predict how many customers will be expected and what kind of sales will be expected. This could help them plan their staffing and stocks.

orchestra answered 11 months ago

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