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Module 1 Lesson 4

The document discusses linear regression for business statistics. It covers modeling a regression, estimating the model with software, interpreting the estimated model, and making predictions. As an example, it examines three scenarios for selling a toy, using the regression model to predict unit sales for each scenario, and determining that scenario 3 would maximize predicted sales.

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andri00
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88 views16 pages

Module 1 Lesson 4

The document discusses linear regression for business statistics. It covers modeling a regression, estimating the model with software, interpreting the estimated model, and making predictions. As an example, it examines three scenarios for selling a toy, using the regression model to predict unit sales for each scenario, and determining that scenario 3 would maximize predicted sales.

Uploaded by

andri00
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Linear Regression for Business Statistics

Overview of Regression

1. Modeling Developing a regression model

2. Estimation Using software to estimate the model

3. Inference Interpreting the estimated regression model

4. Prediction Making predictions about the variable of interest


Linear Regression for Business Statistics
Overview of Regression

1. Modeling Developing a regression model

2. Estimation Using software to estimate the model

3. Inference Interpreting the estimated regression model

4. Prediction Making predictions about the variable of interest


Linear Regression for Business Statistics
Overview of Regression

1. Modeling Developing a regression model

2. Estimation Using software to estimate the model

3. Inference Interpreting the estimated regression model

4. Prediction Making predictions about the variable of interest


Linear Regression for Business Statistics
Overview of Regression

1. Modeling Developing a regression model

2. Estimation Using software to estimate the model

3. Inference Interpreting the estimated regression model

4. Prediction Making predictions about the variable of interest


Linear Regression for Business Statistics
Overview of Regression

1. Modeling Developing a regression model

2. Estimation Using software to estimate the model

3. Inference Interpreting the estimated regression model

4. Prediction Making predictions about the variable of interest


Linear Regression for Business Statistics
4. Prediction Making predictions about the variable of interest

For the coming six months, company management is considering


three alternative scenarios for selling this particular toy.
Linear Regression for Business Statistics
4. Prediction Making predictions about the variable of interest

For the coming six months, company management is considering


three alternative scenarios for selling this particular toy.

Scenario 1: Price = 9.10$, AdExp = 52,000$, PromExp = 61,000$


Linear Regression for Business Statistics
4. Prediction Making predictions about the variable of interest

For the coming six months, company management is considering


three alternative scenarios for selling this particular toy.

Scenario 1: Price = 9.10$, AdExp = 52,000$, PromExp = 61,000$

Scenario 2: Price = 7.10$, AdExp = 48,000$, PromExp = 57,000$


Linear Regression for Business Statistics
4. Prediction Making predictions about the variable of interest

For the coming six months, company management is considering


three alternative scenarios for selling this particular toy.

Scenario 1: Price = 9.10$, AdExp = 52,000$, PromExp = 61,000$

Scenario 2: Price = 7.10$, AdExp = 48,000$, PromExp = 57,000$

Scenario 3: Price = 8.10$, AdExp = 50,000$, PromExp = 60,000$


Linear Regression for Business Statistics
4. Prediction Making predictions about the variable of interest

For the coming six months, company management is considering


three alternative scenarios for selling this particular toy.

Scenario 1: Price = 9.10$, AdExp = 52,000$, PromExp = 61,000$

Scenario 2: Price = 7.10$, AdExp = 48,000$, PromExp = 57,000$

Scenario 3: Price = 8.10$, AdExp = 50,000$, PromExp = 60,000$

Which scenario to implement to maximize unit sales?


Linear Regression for Business Statistics
4. Prediction Making predictions about the variable of interest

Scenario 1: Price = 9.10$, AdExp = 52,000$, PromExp = 61,000$

Predicted Sales = 72587.31

Scenario 2: Price = 7.10$, AdExp = 48,000$, PromExp = 57,000$

Predicted Sales = 72892.96

Scenario 3: Price = 8.10$, AdExp = 50,000$, PromExp = 60,000$

Predicted Sales = 74542.75 ≈ 74542


Linear Regression for Business Statistics
Overview of Regression

1. Modeling Developing a regression model

2. Estimation Using software to estimate the model

3. Inference Interpreting the estimated regression model

4. Prediction Making predictions about the variable of interest


Linear Regression for Business Statistics
Overview of Regression

1. Modeling Developing a regression model

2. Estimation Using software to estimate the model

3. Inference Interpreting the estimated regression model

4. Prediction Making predictions about the variable of interest


Linear Regression for Business Statistics
Overview of Regression

1. Modeling Developing a regression model

2. Estimation Using software to estimate the model

3. Inference Interpreting the estimated regression model

4. Prediction Making predictions about the variable of interest


Linear Regression for Business Statistics
Overview of Regression

1. Modeling Developing a regression model

2. Estimation Using software to estimate the model

3. Inference Interpreting the estimated regression model

4. Prediction Making predictions about the variable of interest


Linear Regression for Business Statistics
Overview of Regression

1. Modeling Developing a regression model

2. Estimation Using software to estimate the model

3. Inference Interpreting the estimated regression model

4. Prediction Making predictions about the variable of interest

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