Question

In: Math

The sales of a company in million dollars) for each year are shown in the table below.


Problem 3: The sales of a company in million dollars) for each year are shown in the table below. 

x (year)20052006200720082009
y (sales)1219293745

a) Find the least square regression line y -ax+b. 

b) Use the least squares regression line as a model to estimate the sales of the company in 2012. 

Solutions

Expert Solution

I used Excel to solve this question.

Que.3

Step.1 Enter data in Excel

Step.2 Go to 'Data' menu ----> 'Data Analysis' ----> Regression.

Step.3 New window will pop up on screen ---> enter X and Y range and output range. You will get following result.

x y SUMMARY OUTPUT
2005 12
2006 19 Regression Statistics
2007 29 Multiple R 0.998868138
2008 37 R Square 0.997737557
2009 45 Adjusted R Square 0.996983409
Standard Error 0.730296743
Observations 5
ANOVA
df SS MS F Significance F
Regression 1 705.6 705.6 1323 4.57036E-05
Residual 3 1.6 0.533333
Total 4 707.2
Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
Intercept -16830.4 463.4969112 -36.3118 4.59E-05 -18305.45403 -15355.34597 -18305.45403 -15355.34597
X Variable 1 8.4 0.230940108 36.37307 4.57E-05 7.665045508 9.134954492 7.665045508 9.134954492

Que. a

Least square regression line is

Y = 8.4 X - 16830.4

Que.b

When X = 2012, Sale of the company Y is computed as follows:

Y = 8.4 * 2012 - 16830.4

= 70.8

milcah answered 2 years ago
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