Regression Model for Sales
Not what you're looking for?
Colorful Tile, Inc, is a rapidly growing chain of ceramic tile outlets that cater to the do-it-yourself home remodeling market. In 2002, 33 stores were operated in small to medium-size metropolitian markets. An in-house study of sales by these outlets revealed the following (standard error in parenthesis):
Q = 5 - 5P + 1.5A + 0.5I + 0.2HF
(3) (1.8) (0.7) (0.2) (0.1)
R-square = 93%, Standard Error of Estimate = 6
Here, Q is tile sales (in thousands of cases), P is tile price (per case), A is advertising expenses (in thousands of dollars), I is disposable income per capita (in thousands of dollars), and HF is Household formation (in hundreds).
A. Fully evaluate and interpret these empirical results on an overall basis using R-square, R-square(bar), F statistic, and SEE information.
B. Is quantity demanded sensitive to "own" price?
C. Austin, Texas, was a typical market covered by this analysis. During 2002 in the Austin market, price was $5, advertising was $30,000, income was an average $40,000 per household, and the number of household formations was 5,000. Calculate and interpret the relevant advertising point elasticity.
D. Assume that the preceding model and data are relevant for the coming period. Estimate the probability that the Austin store will make a profit during 2003 if total costs are projected to be $300,000.
Purchase this Solution
Solution Summary
Evaluates and interprets empirical results on an overall basis using R-square, R-square(bar), F statistic, and SEE information.
Purchase this Solution
Free BrainMass Quizzes
Social Media: Pinterest
This quiz introduces basic concepts of Pinterest social media
Employee Orientation
Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.
Managing the Older Worker
This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce
Accounting: Statement of Cash flows
This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.
Understanding the Accounting Equation
These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.