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    Regression analysis

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    A,B,C Inc. produces fresh, a brand of liquid laundry detergent. In order to more effectively manage its inventory and make revenue projections, the company would like to like to better predict demand for Fresh. The company has established the flowing demand equation:

    Demand = Bo + B1FreshPrice + B2ComPrice + B3AdvExpend

    Your Minitab Output follows:

    Regression Analysis: Demand versus FreshPrice, ComPrice, AdvExpend

    The regression equation is
    Demand = 7.59 - 2.36 FreshPrice + 1.61 ComPrice + 0.501 AdvExpend

    Predictor Coef SE Coef T stat Pvalue
    Constant 7.589 2.445 3.10 0.005
    FreshPrice -2.3577 0.6379 -3.70 0.001
    ComPrice 1.6122 0.2954 5.46 0.000
    AdvExpend 0.5012 0.1259 3.98 0.000

    S = 0.234669 R-Sq = 89.4% R-Sq(adj) = 88.1%

    Analysis of Variance

    Source DF SS MS F Sign F
    Regression 3 12.0268 4.0089 72.80 0.000
    Residual Error 26 1.4318 0.0551
    Total 29 13.4586

    Source DF Seq SS
    FreshPrice 1 2.9631
    ComPrice 1 8.1907
    AdvExpend 1 0.8729

    Unusual Observations

    Obs FreshPrice Demand Fit SE Fit Residual St Resid
    5 3.60 9.3300 8.8164 0.0864 0.5136 2.35R

    R denotes an observation with a large standardized residual.

    Predicted Values for New Observations

    New
    Obs Fit SE Fit 95% CI 95% PI
    1 8.4107 0.0469 (8.3143, 8.5070) (7.9188, 8.9025)

    Values of Predictors for New Observations

    New
    Obs FreshPrice ComPrice AdvExpend
    1 3.70 3.90 6.50

    a. Write out the regression equation.
    b. Predict the Demand when FreshPrice is 3.70, ComPrice is 3.90 and AdvExpend is 6.50.
    c. Using the data from #1 above:
    1. Report R-Sq and Adj R-SQ. Explain there differences and explain their meaning in the context of this problem.
    2. Test the entire Model for significance. That is, the F test. Let alpha equal .05.

    d. Using the t tests on each of the independent variables and also the p values.

    © BrainMass Inc. brainmass.com June 3, 2020, 9:00 pm ad1c9bdddf
    https://brainmass.com/statistics/regression-analysis/regression-analysis-162009

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    Solution Summary

    Step by step method for regression analysis is discussed here. Regression coefficients, coefficient of determination, scatter diagram and significance of regression model are explained in the solution.

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