Business Statistics

494 Business Statistics

Use  = 0.05 and develop a regression model to predict sales from advertisement expenses in-

curred by performing the following steps:

1. Construct a scatter plot between sales and advertisement.

2. Calculate the coefcient of determination, standard error of the estimate, and state its

interpretation.

3. Predict sales when advertisement is 3000 million rupees.

4. Use residual analysis to test the assumptions of the regression model.

5. Perform the t test for the slope of the regression line.

6. Test the overall model.

Solution The first step in developing a regression model is to construct a scatter ...