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Scatter diagram, regression

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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 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.

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 provided by:
  • BE, Bangalore University, India
  • MS, University of Wisconsin-Madison
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