Regression Analysis for a Business Decision
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Give an example of how regression analysis can be used in your work to make a business decision. Give the dependent and independent variables. Make up data and compute the regression equation. Is it significant at the .05 level?
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This solution discusses how regression analysis could be used in a business decision.
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Give an example of how Regression Analysis can be used in your work to make a business decision. Give the dependent and independent variables. Make up data and compute the regression equation. Is it significant at the .05 level?
A business needs to take into account of its costs. So, here is one example. Supposed, the cost of commercial for Super bowl are as followed:
Year Cost
1999 $2,000,000
2000 $1,900,000
2001 $2,100,000
2002 $2,450,000
2003 $2,800,000
2004 $2,950,000
Here, we can see that our independent variable will be year (since time is always an independent variable). Our dependent variable will be the costs of commercial. Now, why is this important? Well, all business needs to be advertised. Some believed that the best advertisement comes directly during the Super Bowl. So, it is important for the company to predict how much it would spend in the future using a regression analysis.
Using SAS, the following analysis was obtained.
16:26 Wednesday, January 28, 2009 1
The REG Procedure
Model: MODEL1
...
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