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Mark Price, the new productions manager for Speakers and Company, needs to find out which variable most affects the demand for their line of stereo speakers. He is uncertain whether the unit price of the product or the effects of increased marketing are the main drivers in sales and wants to use regression analysis to figure out which factor drives more demand for its particular market. Pertinent information was collected by an extensive marketing project that lasted over the past 12 years and was reduced to the data that follow: YEAR 1 2 3 4 5 6 7 8 9 10 11 12 UNIT SALES (THOUSANDS) 375 675 875 1,296 1,148 1.175 875 1,106 972 1,239 874 805 PRICE $/UNIT y bar = 279 220 217 206 220 194 221 203 226 217 221 248 ADVERTISING ($000) 616 830 Forecasted sales 1.106 1,403 1,204 1,296 874 1,106 695 874 695 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.) 695 + Price c. Predict average yearly speaker sales for Speakers and Company based on the regression results if the price was $275 per unit and the amount spent on advertising (in thousands) was $875. (Enter your answer in thousands. Round your intermediate calculations and final answer to 2 decimal places.) advertising thousand units

Mark Price, the new productions manager for Speakers and Company, needs to find out which variable most affects the demand for their line of stereo speakers. He is uncertain whether the unit price of the product or the effects of increased marketing are the main drivers in sales and wants to use regression analysis to figure out which factor drives more demand for its particular market. Pertinent information was collected by an extensive marketing project that lasted over the past 12 years and was reduced to the data that follow: YEAR 1 2 3 4 5 6 7 8 9 10 11 12 UNIT SALES (THOUSANDS) 375 675 875 1,296 1,148 1.175 875 1,106 972 1,239 874 805 PRICE $/UNIT y bar = 279 220 217 206 220 194 221 203 226 217 221 248 ADVERTISING ($000) 616 830 Forecasted sales 1.106 1,403 1,204 1,296 874 1,106 695 874 695 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.) 695 + Price c. Predict average yearly speaker sales for Speakers and Company based on the regression results if the price was $275 per unit and the amount spent on advertising (in thousands) was $875. (Enter your answer in thousands. Round your intermediate calculations and final answer to 2 decimal places.) advertising thousand units

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter13: Regression And Forecasting Models
Section13.3: Simple Regression Models
Problem 6P: Do the sales prices of houses in a given community vary systematically with their sizes (as measured...
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Mark Price, the new productions manager for Speakers and Company, needs to find out which variable most affects the demand for their line of stereo speakers. He is uncertain whether the unit price of the product or the effects of increased marketing are the main drivers in sales and wants to use regression analysis to figure out which factor drives more demand for its particular market. Pertinent information was collected by an extensive marketing project that lasted over the past 12 years and was reduced to the data that follow: YEAR 1 2 3 4 5 6 7 8 9 10 11 12 UNIT SALES (THOUSANDS) 375 675 875 1,296 1,148 1,175 875 1,106 972 1,239 874 805 PRICE $/UNIT y bar = 279 220 217 206 220 194 221 203 226 217 221 248 ADVERTISING ($000) 616 Forecasted sales 830 1,106 1,403 1,204 1,296 874 1,106 695 874 695 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.) 695 + Price c. Predict average yearly speaker sales for Speakers and Company based on the regression results if the price was $275 per unit and the amount spent on advertising (in thousands) was $875. (Enter your answer in thousands. Round your intermediate calculations and final answer to 2 decimal places.) advertising thousand units
Transcribed Image Text:Mark Price, the new productions manager for Speakers and Company, needs to find out which variable most affects the demand for their line of stereo speakers. He is uncertain whether the unit price of the product or the effects of increased marketing are the main drivers in sales and wants to use regression analysis to figure out which factor drives more demand for its particular market. Pertinent information was collected by an extensive marketing project that lasted over the past 12 years and was reduced to the data that follow: YEAR 1 2 3 4 5 6 7 8 9 10 11 12 UNIT SALES (THOUSANDS) 375 675 875 1,296 1,148 1,175 875 1,106 972 1,239 874 805 PRICE $/UNIT y bar = 279 220 217 206 220 194 221 203 226 217 221 248 ADVERTISING ($000) 616 Forecasted sales 830 1,106 1,403 1,204 1,296 874 1,106 695 874 695 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.) 695 + Price c. Predict average yearly speaker sales for Speakers and Company based on the regression results if the price was $275 per unit and the amount spent on advertising (in thousands) was $875. (Enter your answer in thousands. Round your intermediate calculations and final answer to 2 decimal places.) advertising thousand units
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