Quantitative Analysis for Management, 13/e

Solved Problems

1. Solved Problem 4-1 Judith Thompson runs a florist shop on the Gulf Coast of Texas, specializing in floral arrangements for weddings and other special events. She advertises weekly in the local newspapers and is considering increasing her advertising budget. Before doing so, she decides to evaluate the past effectiveness of these ads. Five weeks are sampled, and the advertising dollars and sales volume for each of these are shown in the following table. Develop a regression equation that would help Judith evaluate her advertising. Find the coefficient of determination for this model.

   SALES ($1,000)	ADVERTISING ($100)
   11	5
   6	3
   10	7
   6	2
   12	8

   Solution

   SALES Y	ADVERTISING x	${(X-\overline{X})}^2$	$(X-\overline{X})(Y-\overline{Y})$
   11	5	${(5-5}^{}$