A certain beverage company provides a complete line of beer, wine, and soft drink products for distribution through retail outlets in central Iowa. Unit price data for 2011 and 2014 and quantities sold in cases for 2011 follow. Use 2011 as the base period. Unit Price ($) Item 2011 Quantity (cases) 2011 2014 Beer 30,000 18.50 20.15 Wine 5,000 100.00 117.00 Soft drink 60,000 8.00 8.80
Correlation
Correlation defines a relationship between two independent variables. It tells the degree to which variables move in relation to each other. When two sets of data are related to each other, there is a correlation between them.
Linear Correlation
A correlation is used to determine the relationships between numerical and categorical variables. In other words, it is an indicator of how things are connected to one another. The correlation analysis is the study of how variables are related.
Regression Analysis
Regression analysis is a statistical method in which it estimates the relationship between a dependent variable and one or more independent variable. In simple terms dependent variable is called as outcome variable and independent variable is called as predictors. Regression analysis is one of the methods to find the trends in data. The independent variable used in Regression analysis is named Predictor variable. It offers data of an associated dependent variable regarding a particular outcome.
A certain beverage company provides a complete line of beer, wine, and soft drink products for distribution through retail outlets in central Iowa. Unit price data for 2011 and 2014 and quantities sold in cases for 2011 follow. Use 2011 as the base period.
| Unit Price ($) | |||
|---|---|---|---|
| Item | 2011 Quantity (cases) |
2011 | 2014 |
| Beer | 30,000 | 18.50 | 20.15 |
| Wine | 5,000 | 100.00 | 117.00 |
| Soft drink | 60,000 | 8.00 | 8.80 |
Compute the price relatives for this company's products. (Round your answers to two decimal places.)
Item - Price Relative
Beer
Wine
Soft drink
Use a weighted average of price relatives to show that this method provides the same index as the weighted aggregate method. (Round your answers to the nearest integer.)
-weighted average of price relatives index:
-weighted aggregate price index:
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