Sales Force Performance. Data on the following variables were obtained for a random sample...

Sales Force Performance. Data on the following variables were obtained for a random sample of 25 sales territories for a company (the data have been transformed to preserve confidentiality).

y, sales in units for the territory (SALES)

x1, length of time territory salesperson has been with the company (TIME)

x2, industry sales in units for the territory (POTENT)

x3, dollar expenditures on advertising (ADV)

x4, weighted average of past market share for 4 previous years (SHARE)

x5, change in market share over the 4 years before the time period analyzed (SHARECHG)

x6, total number of accounts assigned to salesperson (ACCTS)

x7, average workload per account using a weighted index based on annual purchases of accounts and concentration of accounts (WORKLOAD)

x8, an aggregate rating on a 1–7 scale on eight dimensions of performance by applicable field sales manager (RATING)

The data are available in a file named TERRITORY8 and were analyzed in D. W. Cravens, R. B. Woodruff, and J. C. Stamper, “An Analytical Approach for Evaluating Sales Territory Performance,” Journal of Marketing 36 (1972): 31–37.

The goal of the study is to identify factors that influence territory sales (y). The equation to be developed will be used to assess whether salespersons in respective territories are performing up to standard.

Develop an appropriate model to explain sales territory performance. Use any of the techniques discussed to select appropriate variables. Be sure to examine scatterplots and residual plots for violations of assumptions and to correct for any such violations.

a. For the model you select, report the estimated regression equation. Be sure to define the variables used.

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b. For the model you select, report any corrections for violations of assumptions.

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c. For the model you select, report the R2, standard error, and Cp value.

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d. Discuss how this equation could be used to set a performance standard for sales territories. How would average performance be determined? Below-average performance? What limitations would this approach have for setting performance standards?