Enterprise Industries produces Fresh, a brand of liquid laundry detergent. In or

Question

Enterprise Industries produces Fresh, a brand of liquid laundry detergent. In order to manage its inventory more effectively and make revenue projections, the company would like to better predict demand for Fresh. To develop a prediction model, the company has gathered data concerning demand for Fresh over the last 30 sales periods (each sales period is defined to be a four-week period). The demand data are presented in table concerning y demand or Fresh iquid laundry detergent)?(the price of Fresh 2 he average industry pnce of competitors similar detergents and (Enterprise Industries, advertising expenditure Tor Fresh). ?? ultimately increase the demand for Fresh, Enterprise Industries, marketing department is comparing the erectiveness or three different advertising campaigns. These campaigns are denoted as campaigns A, B, and C. Campaign A consists entirely of television commercials, campaign B consists of a balanced mixture of television and radio commercials, and campaign C consists of a balanced mixture of television, radio, newspaper, and magazine ads. To conduct the study, Enterprise Industries has randomly selected one advertising campaign to be used in each of the 30 sales periods in table below. Although logic would indicate that each of campaigns A, B, and C should be used in 10 of the 30 sales periods Enterprise Industries has made previous commitments to the advertising media involved in the study. As a result, campaigns A, B, and C were randomly assigned to, respectively, 9, 11, and 10 sales periods. Furthermore, advertising was done in only the first three weeks of each sales period, so that the caryover effect of the campaign used in a sales period to the next sales period would be minimized. Table below lists the campaigns used in the sales periods. my variables. Specifically, we define the To compare the effectiveness or advertising campaigns A. B and C, we define two dum dummy variable DB to equal 1 ir campaign ? is used in a sales period and 0 otherwise. Furthermore, we define the dummy variable DC to equal 1 if campaign C is used in a sales period and 0 otherwise. The table presents the Excel and Excel add-in (Megastat) output of a regression analysis of the Fresh demand data by using the model

Explanation / Answer

a)from the first table

DB (coefficient of b4) .1975

CI is the lower 95% and upper 95%

CI .0087 .3862

DC (coeffcient b5) .4174

CI .2238 .6111

b)

y= 7.2763 -2.2436*x1+1.4375*x2+ .5554*x3 +.1975*db +.4174*dc

x1 =3.7

x2 = 3.9

x3 =6.5

dc =1 as we are using campaign C

db =0

so y = 7.2763 -2.2436*3.7+1.4375*3.9+ .5554*6.5 .4174*1 =8.60873

c)

we are taking camaing C as reference. The campaign which doesn't have a varaible is the reference

d)

dc = .2200

CI: .355 .4045

p value is .0261 which is < .1 and .05

so the coefficient is not equal to zero

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