DAT 565 Wk 5 Discussion – Patterns and Modeling

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DAT 565 Wk 5 Discussion - Patterns and Modeling
DAT 565 Wk 5 Discussion – Patterns and Modeling
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DAT 565 Wk 5 Discussion – Patterns and Modeling

Post a total of 3 substantive responses over 2 separate days for full participation. This includes your initial post and 2 replies to other students or your faculty member.

Due Day 3

Respond to the following in a minimum of 175 words:

Models help us describe and summarize relationships between variables. Understanding how process variables relate to each other helps businesses predict and improve performance. For example, a marketing manager might be interested in modeling the relationship between advertisement expenditures and sales revenues.

Consider the dataset below and respond to the questions that follow:

Advertisement ($’000)   Sales ($’000)

1068    4489

1026    5611

767      3290

885      4113

1156    4883

1146    5425

892      4414

938      5506

769      3346

677      3673

1184    6542

1009    5088

  • Construct a scatter plot with this data.

  • Do you observe a relationship between both variables?

  • Use Excel to fit a linear regression line to the data. What is the fitted regression model? (Hint: You can follow the steps outlined in Fitting a Regression on a Scatter Plot on page 497 of the textbook.)

  • What is the slope? What does the slope tell us?Is the slope significant?

  • What is the intercept? Is it meaningful?

  • What is the value of the regression coefficient,r? What is the value of the coefficient of determination, r^2? What does r^2 tell us?

  • Use the model to predict sales and the business spends $950,000 in advertisement. Does the model underestimate or overestimates ales?

Due Day 7

Reply to at least 2 of your classmates or your faculty member. Be constructive and professional.