sales and advertising problem

the_sales_and_advertising_data x

The Sales and Advertising Data (2009)

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

43,000

41,000

11,000

47,000

12,000

51,000

13,000

57,000

61,000

Month	Advertising ($)	Sales ($)	Consumer Income ($)
January	10,000		43,000		41,000
February	9,000	40,500
March		11,000	45,000
April		12,000	45,900		47,000
May	49,000
June		51,000
July		13,000	54,000	53,000
August		57,000	55,000
September	14,000	56,000
October	15,000	60,000	58,000
November	15,800		61,000	59,000
December	16,700	63,000

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MBA5004_Managerial Economics

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