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    Linear Regression Analysis

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    Reetika Gupta
    This document summarizes a linear regression analysis of beer sales data over 52 weeks. The data includes price and sales quantities for 3 carton sizes converted to a per-case basis. A regression model was fitted to predict sales of 18-packs from their price. The estimated regression equation found that sales of 18-packs decreased by 93 cases for every $1 increase in price. Additionally, the model was found to have a standard error of 131.54 cases and an R-squared value of 0.749, indicating a strong fit between price and sales.

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    Linear Regression Analysis

    Uploaded by

    Reetika Gupta
    64 views2 pages
    This document summarizes a linear regression analysis of beer sales data over 52 weeks. The data includes price and sales quantities for 3 carton sizes converted to a per-case basis. A regression model was fitted to predict sales of 18-packs from their price. The estimated regression equation found that sales of 18-packs decreased by 93 cases for every $1 increase in price. Additionally, the model was found to have a standard error of 131.54 cases and an R-squared value of 0.749, indicating a strong fit between price and sales.

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    Linear Regression analysis

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    This document summarizes a linear regression analysis of beer sales data over 52 weeks. The data includes price and sales quantities for 3 carton sizes converted to a per-case basis. A regression model was fitted to predict sales of 18-packs from their price. The estimated regression equation found that sales of 18-packs decreased by 93 cases for every $1 increase in price. Additionally, the model was found to have a standard error of 131.54 cases and an R-squared value of 0.749, indicating a strong fit between price and sales.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    64 views2 pages

    Linear Regression Analysis

    Uploaded by

    Reetika Gupta
    This document summarizes a linear regression analysis of beer sales data over 52 weeks. The data includes price and sales quantities for 3 carton sizes converted to a per-case basis. A regression model was fitted to predict sales of 18-packs from their price. The estimated regression equation found that sales of 18-packs decreased by 93 cases for every $1 increase in price. Additionally, the model was found to have a standard error of 131.54 cases and an R-squared value of 0.749, indicating a strong fit between price and sales.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Introduction:

    This sample data file contains 52 weeks of price and sales data for 3 carton sizes of beer at a
    small chain of supermarkets.  The price and quantity-sold variables have all been converted
    to a per-case (i.e., per-24-can) basis to allow prices and quantities to be directly compared in
    charts and model coefficients.  For example, the value of $19.98 for the price of 12-packs in
    week 1 means that a 12-pack sold for $9.99 in that week, and the value of 223.5 for cases of
    12-packs sold in that week means that 447 12-packs were sold.
    The following worksheets illustrate the analysis of this data using Linear Regression Model
    in MS Excel.
    Objectives
     To fit a simple regression model to predict sales of 18-packs from price of 18-
    packs.  
    Here is the standard regression summary output (as formatted by Regress it) for a
    model in which SALES_18PK is the dependent variable and PRICE_18PK is the
    independent variable:

    Observations
     The estimated regression equation is printed out at the top:  Predicted
    CASES_18PK = 1822.97759 – 93.578458*PRICE_18PK.  It shows how the
    coefficients that appear in the regression summary table below are to be used in
    predicting sales from price.  This is the equation of a straight line
    whose intercept is 1822 and which has a slope of -93.578458, which means the
    model predicts that 93 fewer cases worth of 18-packs will be sold per
    $1 increase in the price per case.
     From the usual 2-standard-error rule of thumb, it follows that a 95% confidence
    interval for a forecast from the model is approximately equal to the point
    forecast plus or minus 2 times the standard error of the regression.  
     The most important number in the output, besides the model coefficients, is the
    standard error of the regression, which is 131.54 in this case.
     Because this is a simple regression model, R-squared is merely the square of the
    correlation between price and sales:  0.74933721 = (-0.86564266)2
     The estimated intercept is 1823 (cases) with a standard error of 131.011702.  The
    standard error of a coefficient is the estimated standard deviation of the error in
    estimating it. By the usual rule of thumb, an approximate 95% confidence
    interval for a coefficient is the point estimate plus or minus two standard errors,
    which is 1823 +/- 2(131) = [1559,2086] for the intercept.  The exact 95%
    confidence interval is [1559,2086] as shown in the regression summary table.
     The coefficient of PRICE_18PK is -93.57 with a standard error of 7.73, and its
    95% confidence interval is [-109.1, -78.04]

    INTERPRETATION/CONCLUSION
    The P value for the model is 0.035843, which is less that 0.05 and therefore this shows that there is a significant
    relationship between both the factors in the model
    The R square value here is 0.749 and it is considered to show that the model is strong as it is close to the value 1.
    We can conclude that there is a significant impact of no. of cans in one pack on prices of those each pack.

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