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Econometrics Modelling

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You have been given some information about a company's sales of a type of confectionary. The attached Excel spreadsheet contains weekly sales volumes, average selling prices and distribution (the percentage of retail stores stocking the product in that week) over a three year period for 4 Stock Keeping Units (SKUs) of this type of confectionary. These SKUs are essentially the same product but sold in different sizes, colours or packaging. The spreadsheet also contains information about the total market size by volume for this type of product and the average market price for this type of product.

1. Construct the best model that you believe best predicts future sales of these
products; and
2. Use charts to illustrate how well this model fits the historic data.

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Solution Preview

For a very efficient in building the best model while creating charts at the same time, I used Excel's built in scatter graph function where I added the trendline and displayed the regression equation.

Based on the econometrics model presented below, if you want to have a stronger relationship between your predictor variables and the sales volume, you ...

Solution Summary

Constract an econometrics model that can predict sales volume are provided.