Analysts at a company that produces small appliances are looking at sales of foo

Question

Analysts at a company that produces small appliances are looking at sales of food preparation products in a medium-size city in the Midwest. They have noticed that sales in this city have not been meeting forecast values for several months and want to look at the problem in more detail. They have collected data on monthly sales ($), advertising expenditure ($), number of competing products available, number of discount opportunities (sales, coupons, etc.) offered during the month, and the warranty period of the item. The regression output is found below. What is the response variable in this problem? Sales Advertising Number of Competitors Discounts Warranty None of the above As advertising expenditure increase, what do you think the effect on sales will be? Sales will increase Sales will decrease No effect on sales As the number of competitors increase, what do you think the effect on sales will be? Sales will increase Sales will decrease No effect on sales What do you think the effect on sales will be by reducing Discounts? Sales will increase Sales will decrease No effect on sales

Explanation / Answer

19) Response variable is the dependent variable in the regression . Sales in the above output is the dependent variable that is the response variable . Rest of the variables in the above output are called independent or explanatory variables.

20) As the coefficient of advertising variable is 2265882196 >0, therefore increasing the advertising expenditure thus increases the sales.

21) The coefficient of the competitors variable is -510 < 0. Therefore, increasing the competitors thus decreases the sales.

22) Same explanation as Q20 --> reducing discounts reducing sales because coefficient of discounts is positive.

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