Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Statistics and Probability Expert

Correlation coefficient and scatter plot. 

A CEO of a large pharmaceutical company would like to conclude if he has to be placing more money allotted in the budget next year for television advertising of a new drug marketed for controlling asthma. He wonders whether there is a strong relationship between amount of money spent on television advertising for this new drug called XBC and the number of orders received. The manufacturing process of this drug is very difficult and requires stability so the CEO would prefer to generate a stable number of orders. The cost of advertising is always an important consideration in the phase I roll-out of a new drug. Data that have been collected over the past 20 months point to the amount of money spent of television advertising and the number of orders received.

The use of linear regression is a critical tool for a manager's decision-making ability. Please carefully read the instance below and try to answer the problems in terms of the problem context. The results are as follows:

Month

Advertising Cost (thousands of dollars)

Number of Orders

1

$68.93

4,902,000

2

72.62

3,893,000

3

79.58

5,299,000

4

58.67

4,130,000

5

69.18

4,367,000

6

70.14

5,111,000

7

83.37

3,923,000

8

68.88

4,935,000

9

82.99

5,276,000

10

75.23

4,654,000

11

81.38

4,598,000

12

52.90

2,967,000

13

61.27

3,999,000

14

79.19

4,345,000

15

80.03

4,934,000

16

78.21

4,653,000

17

83.77

5,625,000

18

62.53

3,978,000

19

88.76

4,999,000

20

72.64

5,834,000

Set up a scatter diagram and find out the associated correlation coefficient. Examine how strong you think the relationship is between the amounts of money spent on television advertising and the number of orders received. Please use the Correlation procedures within Excel under Tools > Data Analysis. The Scatter plot can more easily be generated using the Chart procedure.

Interpret the meaning of the slope, b1, in the regression equation.

Predict the monthly advertising cost when the number of orders is 5,100,000.

Compute the coefficient of determination, r2, and interpret its meaning.

Compute the standard error of estimate, and interpret its meaning.

Statistics and Probability, Statistics

  • Category:- Statistics and Probability
  • Reference No.:- M922931

Have any Question? 


Related Questions in Statistics and Probability

1 if the independent variable has absolutely no effect on

1. If the independent variable has absolutely no effect on the dependent variable, will the means of the experimental conditions be the same? Why or why not? 2. An ANOVA for a one-way design partitions the total variance ...

Hello kitty company claims that the proportion of its

Hello Kitty Company claims that the proportion of its employees investing in individual investment accounts is higher than national proportion of 50%. A survey of 100 employees in Hello Kitty Company indicated that 58 of ...

Questiona mining company has gained the drilling rights at

Question: A mining company has gained the drilling rights at two sites A and B. Each cost €100,000 each. Based on past experience they have estimated the chances of a successful drill as follows: P(A) = 0.6, P(B) = 0.5 I ...

Let n y fiiisinn s p be an aumann model of incomplete

Let (N, Y, (F i ) i ∈N , s, P) be an Aumann model of incomplete information with beliefs, and let W ⊆ Y be an event. Prove that (N,W, (F i  ∩ W) i ∈N  , P(· | W)) is also an Aumann model of incomplete information with be ...

Assignment- data description collection and sampling1a

Assignment- Data: Description, Collection, and Sampling 1. A study was conducted of the 12-month earnings per share for two categories of airline companies, with the result shown in the chart below. Based on the data, wh ...

Recommendationsremember that your recommendations should be

Recommendations: Remember that your recommendations should be as authentic to a real-world situation as possible. If you are going to be asking your organization to spend money on training, for example, your justificatio ...

Let f be a social welfare function satisfying the

Let F be a social welfare function satisfying the independence of irrelevant alternatives property, and let a, b be two distinct alternatives. Let P N and QN be two strict preference profiles satisfying a> Pi b ⇔ a>Q i b ...

Use a fast food restaurant and for 5 types of food from the

Use a fast food restaurant and for 5 types of food from the restaurant, list the fat grams and its total calories. Is there a linear relationship between the two variables? The double whopper has 900 calories and 56 gram ...

1 what is validity2 distinguish between face validity

1. What is validity? 2. Distinguish between face validity, construct validity, and criterion-related validity. In general, which kind of validity is least important to researchers? 3. Can a measurement procedure be valid ...

In january 2011 the average monthly rental rate for

In January 2011, the average monthly rental rate for one-bedroom apartments in a certain city was $783. Suppose rental rates across all one-bedroom apartments in this city follow approximately a normal distribution, with ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen