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Statistics - Develop a Linear Regression Model

Carpet City wants to develops a means to forecast it carpet sale. The store manager believes that the store's sale are directly related to the number of new housing starts in town. The manager has gathered data from county records on monthly house construction permits and from store records on monthly sales.

Monthly Carpet Sales 1,0000 yd Monthly Construction Permit
5 21
10 35
4 10
3 12
8 16
2 9
12 41
11 15
9 18
14 26

Develop a linear regression model for these data and forecast carpet sales if 30 construction permit for new homes are filed.

Determine the strength of the casual relationship between monthly sales and new home construction by using correlation.

Solution Summary

A Complete, Neat and Step-by-step Solution is provided in the attached Excel file.