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    Scatter diagram, regression

    Quick-print firms in a large downtown business area spend most of their advertising dollars on advertisements on bus benches. A research project involves predicting monthly sales based on the annual amount spent on placing ads on bus benches. A sample of quick-print firms revealed these advertising expenses and sales.

    Annual Bus Bench Advertising
    ($ thousands) Monthly Sales
    ($ thousands)
    2 40
    4 55
    5 75
    7 80
    3 45

    a. Draw a scatter diagram.
    b. Determine the coefficient of correlation.
    c. What is the coefficient of determination?
    d. Compute the regression equation.
    e. Estimate the monthly sales of a quick-print firm that spends $4,500 on bus bench advertisements.
    f. Summarize your findings.

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    Solution Preview

    a) Shown in the excel sheet

    b)Coefficient of correlation = R^2 = .913 ( from the graph).
    So R = .955

    c)Coefficient of Determination = 8.8514 ( Frm the graph)

    d)Regression Equation : ...

    Solution Summary

    The expert draws a scatter diagram. The coefficient of correlation is determined. Monthly sales of a quick-print firm that spends money on bench advertising is estimated.