Assignment:
The Sales and Advertising Data
Kramer Smith Case
Kramer Smith owns a dry-cleaning service and is thinking about changing his advertising expenditures for the year. He hires you as a consultant to determine the relationship between sales, consumer incomes, and advertising by means of multiple regression analysis.
Smith has gathered the sales, income, and advertising data for the last year, as shown in Table 1.
Click here to view Table 1.
Create a report answering the following questions:
• Construct a scatter graph showing the advertising and sales relationship over the last twelve months.
• Using multiple regression, conduct an analysis of the firm's sales revenue, consumer incomes, and advertising.
• Describe how you would explain your results to Smith and what recommendations you would suggest.
• Summarize your recommendations or advice to Smith concerning the relationship between sales, income, and advertising.
Create your report in a 2- to 3-page Microsoft Word document.
Table 1
Month Advertising ($) Sales
($) Consumer Income ($)
January 10,000 43,000 41,000
February 9,000 40,500 43,000
March 11,000 41,000 45,000
April 12,000 45,900 47,000
May 11,000 47,000 49,000
June 12,000 51,000 51,000
July 13,000 54,000 53,000
August 13,000 57,000 55,000
September 14,000 56,000 57,000
October 15,000 60,000 58,000
November 15,800 61,000 59,000
December 16,700 63,000 61,000