Question description

 

 

Month	Advertising ($)	Sales ($)	Consumer Income ($)
January	10,000	43,000	41,000
February	9,000	40,500	43,000
March	11,000	41,000	45,000
April	12,000	45,900	47,000
May	11,000	47,000	49,000
June	12,000	51,000	51,000
July	13,000	54,000	53,000
August	13,000	57,000	55,000
September	14,000	56,000	57,000
October	15,000	60,000	58,000
November	15,800	61,000	59,000
December	16,700	63,000	61,000

Kramer Smith Case

Kramer Smith owns a dry-cleaning service and is thinking about changing his advertising expenditures for the year. He hires you as a consultant to determine the relationship between sales, consumer incomes, and advertising by means of multiple regression analysis.

Smith has gathered the sales, income, and advertising data for the last year, as shown in Table 1.

Create a report answering the following questions:

• Construct a scatter graph showing the advertising and sales relationship over the last twelve months.
• Using multiple regressions, conduct an analysis of the firm’s sales revenue, consumer incomes, and advertising.
• Describe how you would explain your results to Smith and what recommendations you would suggest.
• Summarize your recommendations or advice to Smith concerning the relationship between sales, income, and advertising.

Create your report in a 2- to 3-page Microsoft Word document