EBK STATISTICAL TECHNIQUES IN BUSINESS
EBK STATISTICAL TECHNIQUES IN BUSINESS
17th Edition
ISBN: 9781259924163
Author: Lind
Publisher: MCGRAW HILL BOOK COMPANY
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Question
Chapter 13, Problem 1SR

a.

To determine

Identify the dependent variable and independent variable.

a.

Expert Solution
Check Mark

Answer to Problem 1SR

The dependent variable is the ‘sales revenue’ and the independent variable is the ‘advertising expense’.

Explanation of Solution

Data on the number of times the advertisement was aired and digital camera sales are given.

Independent variable:

The variable that can be used to predict the values of other variable is called an independent variable.

Dependent variable:

The variable that can be predicted by other variables is called a response variable or a dependent variable.

Here, the variable ‘sales revenue’ can be predicted using the variable ‘advertising expense’. Therefore, the dependent variable is the ‘sales revenue’ and the independent variable is the ‘advertising expense’.

b.

To determine

Construct a scatter diagram.

b.

Expert Solution
Check Mark

Answer to Problem 1SR

The scatter diagram of the data is represented below:

EBK STATISTICAL TECHNIQUES IN BUSINESS, Chapter 13, Problem 1SR , additional homework tip  1

Explanation of Solution

Calculation:

The scatterplot of the data is as follows:

Software Procedure:

Step-by-step procedure to obtain the scatterplot using Mega Stat software:

  • In an EXCEL sheet enter the data values of x and y.
  • Go to Add-Ins > Mega Stat > Correlation/Regression > Scatterplot.
  • Enter horizontal axis as $A$1:$A$5 and vertical axis as $B$1:$B$5.
  • Click on OK.

The scatterplot of the data shows an increasing trend.

c.

To determine

Find the correlation coefficient.

c.

Expert Solution
Check Mark

Answer to Problem 1SR

Thus, the correlation coefficient is 0.965.

Explanation of Solution

Calculation:

Software procedure:

Step-by-step procedure to obtain the correlation matrix using Mega Stat software:

  • In an EXCEL sheet enter the data values of x and y.
  • Go to Add-Ins > Mega Stat > Correlation/Regression > Correlation matrix.
  • Enter Input Range as $A$1:$b$5.
  • Click on OK.

Output obtained using Mega Stat is given as follows:

EBK STATISTICAL TECHNIQUES IN BUSINESS, Chapter 13, Problem 1SR , additional homework tip  2

Thus, the correlation coefficient is 0.965.

d.

To determine

Interpret the strength of the correlation coefficient.

d.

Expert Solution
Check Mark

Explanation of Solution

From Part (c), the correlation coefficient is 0.965. Since the correlation coefficient is positive and close to 1, there is a strong positive correlation between ‘sales revenue’ and ‘advertising expense’. The correlation coefficient indicates that as the value of ‘advertising expense’ increases, the ‘sales revenue’ also increases.

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Chapter 13 Solutions

EBK STATISTICAL TECHNIQUES IN BUSINESS

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