In: Statistics and Probability
Consider the following sample data for the relationship between advertising budget and sales for Product A: Observation 1 2 3 4 5 6 7 8 9 10 Advertising ($) 90,000 100,000 100,000 110,000 120,000 120,000 130,000 140,000 140,000 150,000 Sales ($) 535,000 626,000 625,000 674,000 712,000 725,000 809,000 832,000 845,000 919,000 What is the predicted sales quantity for an advertising budget of $119,000? Please round your answer to the nearest integer.
Using Regression result Below we will predict the sales at advertising = 119000 .
As we can see from above table the our slope estimator is significant as p<0.05 and we dont really care whether intercept is significant or not because we have to take intercept into consideration as we have no proof of sales = 0 when Advertising = 0 hence Our equation will be:
Sales = a + b*Adv.
=> Sales = 17200 + 5.9416*Adv.
Hence with Adv. = 119000
Sales = 17200 + 5.9416*119000
= 707050
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