Question

information was collected by an extensive marketing project that lasted over the past 12 years and was reduced to the data that follow:

YEAR	UNIT SALES (THOUSANDS)	PRICE $/UNIT	ADVERTISING ($000)
1	400	280	600
2	700	215	835
3	900	211	1,100
4	1,300	210	1,400
5	1,150	215	1,200
6	1,200	200	1,300
7	900	225	900
8	1,100	207	1,100
9	980	220	700
10	1,234	211	900
11	925	227	700
12	800	245	690

a. Perform a regression analysis based on these data using Excel. (Negative values should be indicated by a minus sign. Round your answers to 4 decimal places.)

c. Predict average yearly speaker sales for Speakers and Company based on the regression results if the price was $300 per unit and the amount spent on advertising (in thousands) was $900. (Enter your answer in thousands. Do not round intermediate calculations. Round your answer to 2 decimal places.)

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Answer 1

a.

In this instance, there are two independent variables. They are price/unit and advertising spend. The dependent variable is unit sales. We need to perform multiple regression. The output is shown below.

The regression equation is

Sales = 2191.33 – 6.9Price + 0.32Advertising

c.

If the price is 300 and advertising spend is 900 then the predicted sales number will be

Sales = 2191.33 -6.9*300 + 0.32*900 = 409.33

The predicted sales is 409.33