What is the intercept and explain its meaning

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Reference no: EM132637839

Models help us describe and summarize relationships between variables. Understanding how process variables relate to each other helps businesses predict and improve performance. For example, a marketing manager might be interested in modeling the relationship between advertisement expenditures and sales revenues.

Consider the dataset below and respond to the questions that follow:

Advertisement (000)                Sales (000)

1068                                                 4489
1026                                                 5611
767                                                   3290
885                                                   4113
1156                                                 4883
1146                                                 5425
892                                                   4414
938                                                    5506
769                                                    3346
677                                                    3673
1184                                                   6542
1009                                                   5088

Question 1: Construct a scatter plot with this data.

Question 2: Do you observe a relationship between both variables?

Question 3: Use Excel to fit a linear regression line to the data. What is the fitted regression model?

Question 4: What is the slope? What does the slope tell us?Is the slope significant?

Question 5: What is the intercept? Is it meaningful?

Question 6: What is the value of the regression coefficient,r? What is the value of the coefficient of determination, r^2? What does r^2 tell us?

Question 7: Use the model to predict sales and the business spends $950,000 in advertisement. Does the model underestimate or overestimates ales?

Reference no: EM132637839

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