Practical Management Science
Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
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7

Mark Price, the new productions manager for Speakers and Company, needs to find out which variable most affects the demand for
their line of company speakers. He is uncertain whether the unit price of the product or the effects of increased marketing are the
main drivers in sales and wants to use regression analysis to figure out which factor drives more demand for its particular market.
Pertinent information was collected by an extensive marketing project that lasted over the past 12 years and was reduced to the data
that follow:
YEAR
1
23456
7
8
9
10
11
12
UNIT SALES PRICE $ PER
UNIT
279
220
217
206
220
194
221
203
226
217
221
248
y bar =
(THOUSANDS)
375
675
875
1,296
1,148
1,175
875
1,106
972
1,239
874
805
a. Perform a regression analysis based on these data using Excel.
Note: Negative values should be indicated by a minus sign. Round your answers to 4 decimal places.
4 decimal places required.
Forecasted sales
+
X
ADVERTISING
($000)
616
830
1,106
1,403
1,204
1,296
874
1,106
695
874
695
695
Price
c. Predict average yearly speaker sales for Speakers and Company based on the regression results if the price was $275 per unit and
the amount spent on advertising (in thousands) was $875.
Note: Enter your answer in thousands. Round your intermediate calculations and final answer to 2 decimal places.
advertising
thousand units
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Transcribed Image Text:Mark Price, the new productions manager for Speakers and Company, needs to find out which variable most affects the demand for their line of company speakers. He is uncertain whether the unit price of the product or the effects of increased marketing are the main drivers in sales and wants to use regression analysis to figure out which factor drives more demand for its particular market. Pertinent information was collected by an extensive marketing project that lasted over the past 12 years and was reduced to the data that follow: YEAR 1 23456 7 8 9 10 11 12 UNIT SALES PRICE $ PER UNIT 279 220 217 206 220 194 221 203 226 217 221 248 y bar = (THOUSANDS) 375 675 875 1,296 1,148 1,175 875 1,106 972 1,239 874 805 a. Perform a regression analysis based on these data using Excel. Note: Negative values should be indicated by a minus sign. Round your answers to 4 decimal places. 4 decimal places required. Forecasted sales + X ADVERTISING ($000) 616 830 1,106 1,403 1,204 1,296 874 1,106 695 874 695 695 Price c. Predict average yearly speaker sales for Speakers and Company based on the regression results if the price was $275 per unit and the amount spent on advertising (in thousands) was $875. Note: Enter your answer in thousands. Round your intermediate calculations and final answer to 2 decimal places. advertising thousand units
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