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Regression

The regression analysis found a strong linear relationship (R=0.981) between the actual and predicted quantity sold. Price and advertising were found to be statistically significant predictors of quantity sold based on p-values less than 0.05. The model predicts quantity sold based on the equation: Quantity Sold = 8536.214 - 835.722(Price) + 0.592(Advertising). Residual plots indicate good fit of the linear model to the data.

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54 views6 pages

Regression

The regression analysis found a strong linear relationship (R=0.981) between the actual and predicted quantity sold. Price and advertising were found to be statistically significant predictors of quantity sold based on p-values less than 0.05. The model predicts quantity sold based on the equation: Quantity Sold = 8536.214 - 835.722(Price) + 0.592(Advertising). Residual plots indicate good fit of the linear model to the data.

Uploaded by

ian92193
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Quantity Sold (ACTUAL VALUE) Price Advertising Quantity Sold (Predicted Value)

8500 2 2800 8523.00896712056


4700 5 200 4476.04782464298
5800 3 400 6265.93822650282
7400 2 500 7160.88342743275
6200 5 3200 6252.73331119229
7300 3 1800 7095.05812022584
5600 4 900 5726.33012288276

SUMMARY OUTPUT

Regression Statistics
Multiple R 0.981 - performance (98% accepted)
R Square 0.962
Adjusted R Square 0.943
Standard Error 310.524
Observations 7

ANOVA
df SS MS
Regression 2 9694299.568 4847149.784
Residual 4 385700.432 96425.108
Total 6 10080000.000

Coefficients Std Error t Stat


Intercept 8536.214 386.912 22.062
Price -835.722 99.653 -8.386
Advertising 0.592 0.104 5.676

RESIDUAL OUTPUT

Observation Predicted Quantity Sold


Residuals
1 8523.009 -23.009
2 4476.048 223.952
3 6265.938 -465.938
4 7160.883 239.117
5 6252.733 -52.733
6 7095.058 204.942
7 5726.330 -126.330

Residuals
300.000

200.000

100.000
Residuals
300.000

200.000

100.000

0.000
0 1 2 3 4 5 6 7 8
-100.000

-200.000

-300.000

-400.000

-500.000

-600.000

SUMMARY OUTPUT

Regression Statistics
Multiple R 0.980681431 - performance @ 98% - which is accepted
R Square 0.961736068
Adjusted R Square 0.942604102
Standard Error 310.5239249
Observations 7

ANOVA
df SS MS
Regression 2 9694299.5682 4847149.78412488
Residual 4 385700.43175 96425.1079375621
Total 6 10080000

Coefficients Standard Error t Stat


Intercept (a) 8536.213882 386.91174784 22.0624313684116
Price (X1), 1st ind. Var. -835.722351 99.653044692 -8.38632029722779
Advertising (X2), 2nd ind. Var. 0.592228496 0.104346803 5.67557872858306

RESIDUAL OUTPUT

Observation Predicted Quantity Sold


Residuals
1 8523.008967 -23.00896712
2 4476.047825 223.95217536
3 6265.938227 -465.9382265
4 7160.883427 239.11657257
5 6252.733311 -52.73331119
6 7095.05812 204.94187977
7 5726.330123 -126.3301229
Given:
Intercept 8536.21388243109
Price -835.72235137828
Advertising 0.59222849551644

Formula: y=bx + a or y = a + bx
For this data, 2 independent variables
Formula: y = b1x1 + b2x2 + a
Qty Sold = Price * (-835.7224)+Advertising*(0.5922285)+8536.2139

F Significance F
50.269 0.001 - model is accepted

P-values Lower 95% Upper


Conclusion
95% : Accepted or Rejected
0.0000 7461.975 9610.453
0.0011 -1112.404 -559.041 ACCEPTED
0.0048 0.303 0.882 ACCEPTED
6 7 8

Price Residual Plot


400
200 Advertising Res

Residuals
0 400
-200 1.5 2200 2.5 3 3.5 4

Residuals
-400 0
-600 -200 0 500 1000 1500
-400 Price
F Significance F Interpretation -600
50.26854403 0.0014641285 Model is accepted. Advertis

P-value Lower 95% Upper 95% Lower 95.0%


Upper 95.0%
2.49812E-05 7461.974654 9610.45311087491 7461.975 9610.453
0.001106064 -1112.40356 -559.041143226042 -1112.404 -559.0411
0.004755309 0.3025153251 0.881941665955673 0.302515 0.881942
Price Residual Plot
Advertising Residual Plot
400
2200 2.5 3 3.5 4 4.5 5 5.5
0
-200 0 500 1000 1500 2000 2500 3000 3500
-400 Price
-600
Advertising

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