Solution-Develop a regression model to predict sales

Develop a regression model to predict sales

Assignment Help Basic Statistics

Reference no: EM13855620

Regression

Ranbaxy Laboratories Ltd, incorporated in 1961, is one of india's largest pharmaceutical companies, Following table exhibits the sales volume & advertisement expenditure (in million rupees) of Ranbaxy Laboratories Ltd from 1989-1990 to 2006-2007

Year	Sales (In million rupees).	Advertisement (In million rupees).
1989-1990	2064.5	30.4
1990-1991	2587.8	51
1991-1992	3396.9	59.1
1992-1993	4622.2	79.5
1993-1994	5944.7	50.8
1994-1995	7139.2	98.2
1995-1996	8940.1	112.7
1996-1997	10,427.3	141.6
1997-1998	12,421.3	224.8
1998-1999	11,296.5	169.8
1999-2000	16.670.3	409.3
2000-2001	17,757.1	560.2
2001-2002	19.597.8.	863.5
2002-2003	31,317.6	1306.5
2003-2004	38,889.8	1822.6
2004--2005	38658.7	2017.2
2005-2006	32,840.3	2008.1
2006-2007	35,991.5	1487.1

Regression was run on MS Excel and the partial result below was extracted from the Excel result..

SUMMARY OUTPUT

Regression Statistics
Multiple R	0.9672348
R Square	0.9355432
Adjusted R Square	0.9315146
Standard Error	3430.2371
Observations	18

ANOVA
	df	SS
Regression	1	2732519348
Residual	16	188264427.6
Total	17	2920783775

	Coefficients	Standard Error	T Stat	Lower Upper 95% 95%
Intercept	5794.29	1079.85324	5.3668	3506. 8083
advertisement	17.0779	1.12067000	15.239	14.70 19.46

By using the results above & α=0.05, develop a regression model to predict sales from advertisement expenses incurred by performing the following steps.

State the linear relationship between sales & advertisement & interpret the coefficients.
Obtain the coefficient of determination & interpret it.
Obtain the standard error of estimate & interpret it.
Comment on the t test for the slope of the regression line using confidence interval
Predict sales when advertisement is 3000 million rupees

Reference no: EM13855620

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Develop a regression model to predict sales

Reference no: EM13855620

Reference no: EM13855620

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