Consider the following sample data for the relationship between advertising budget and sales for Product A:
Observation | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 |
---|---|---|---|---|---|---|---|---|---|---|
Advertising ($) | 40,000 | 40,000 | 50,000 | 60,000 | 60,000 | 60,000 | 70,000 | 80,000 | 80,000 | 90,000 |
Sales ($) | 239,000 | 248,000 | 316,000 | 365,000 | 358,000 | 375,000 | 432,000 | 476,000 | 486,000 | 552,000 |
What is the predicted sales quantity for an advertising budget of $64,000?
Please round your answer to the nearest integer.
Note that the correct answer will be evaluated based on the full-precision result you would obtain using Excel.
We can use here Excel for regression equation
Step 1) Enter data in Excel .
Step 2) Data >>Data analysis >>Regression
>>Select y and x values separately >>Ok
We have regression equation is,
Sales = 6241.38+6.01*Advertising
Substitute here in above regression equation Advertising = 64000
=> Sales=6241.38+6.01*64000
=> Sales = 390881.38
=> Sales = 390881(Approximately)
Therefore, the predicted sales quantity for an advertising budget of $64,000 is $390,881
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