The country manager of a retail chain (which has 150 stores) is finalizing plans

Question

The country manager of a retail chain (which has 150 stores) is finalizing plans for sales promotion strategies. Data pertaining to stores such as store location, sales turnover, store size, staf(FTE), and profit margin are stored. The manager wants to find out what can explain profit margin and how to manage stores more efficiently and effectively. You will use regression analysis of retail stores data to assist the manager in developing promotion strategies.

Part 1.

1. Purpose of the report: To describe what you are going to do (1 paragraph)

2. Research Question: What is your main question to find out from this analysis?

3. Hypotheses: Develop hypotheses to give answers for the research question. (H0 & H1)

Explanation / Answer

1) The purpose of this analysis is to develop a regressiion model which will help the manager to define the promotion startegy. And so in this analysis we are going to determine the paramers such as store location, sales turnover, store size, staf(FTE), and profit margin and check the output performance of the store sales. So here we are going to collect the data such as store location, sales turnover, store size, staf(FTE) and check it's impact on profit margin. so here the independent variables which we are going to use are

Independent variables: store location, sales turnover, store size, staf(FTE)

Dependent Variable: Profit Margin.

So the multilinear regression equation which we are going to determine will have impact of all the independent variables on the dependent variable which will help the manager to optimally decide the dependent variables to maximize the profit margin.

2) The main question here is to find out the values of the dependent variables which will maximize the profit margin. And so here we are concenrned with finding the variables which will imapct the profit margin.

3) H0: There is no relationship between the independent variable and the profit margins

H1:There is considerable relationship between the independent variable and the profit margins

After the regression analysis if we get a aprticular variable's p value less than 0.05 (For 95% conf . level) then we will say that there is some relationship between that particulat independent variable and Profit margin and if we get p value>0.05 then we will say that there is no relationship between that particulat independent variable and Profit margin. while we will get the consolidated p value of the whole analysis as well and for the same also we will check the same condition. i.e. if p value of the whole anlysis of multi linear regrssion is  less than 0.05 (For 95% conf . level) then we will say that there exist relationship between that independent variables and Profit margin while if p value is >0.05 then we will say that there is no relationship between independent variables and Profit margin.

Hope this has helped you in understanding the problem. Pls upvote the ans if it has really helped you. Good Luck!!

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