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

Prove that if romeo and juliet are matched to each other

Prove that if Romeo and Juliet are matched to each other under both the men's courtship and the women's courtship algorithms, then they are matched to each other under any stable matching.

Cnsider selecting one card at a time from a 52-card deck

Consider selecting one card at a time from a 52-card deck. What is the probability that the first card is from the suit of hearts and the second card is also from the suit of hearts? (Note there are 13 cards from the sui ...

A shipment of 8 computers contains 2 with defects find the

A shipment of 8 computers contains 2 with defects. find the probability that a sample of size 4, drawn from the 8, will not contain a defective computer. What is the probability that a sample of 4 of the 8 computers will ...

To test the model you will make 5 trades using 5 different

To test the model, you will make 5 trades using 5 different sets of data. You may define the parameters of the put call parity or use the following assumption for the parameters: Interest rate is 5%Transaction costs for ...

A simple random sample of 120 men results in a mean of 80

A simple random sample of 120 men results in a mean of 80 beats per minute, and a standard deviation of 11 beats per minute. Based on the sample results, the researcher concludes that the pulse rates of men have a standa ...

Reliability the data that we collect is not useful unless

Reliability : The data that we collect is not useful unless we know that it is reliable and valid. Think of the judges on the TV show Dancing with the Stars. (There are three or four judges. Each week each judge scores e ...

Do we know what the founding fathers said about the

Do we know what the Founding Fathers said about the institution of slavery in the U.S Constituion? Is the U.S. Constitution pro-slavery, anti-slavery or ambivalent about slavery?

Read full english transcript of osama bin ladens speechwhat

Read: full English transcript of Osama bin Laden's speech What are some examples of bin Laden's complaints against Western society? What seems to be his plan for the Islamic world?

Linear regression and the fitting-lineexercise 1 the

Linear Regression and the "fitting-line" Exercise 1: The following table shows how many weeks six persons have worked at an automobile inspection station and the number of cars each one inspected between 3 p.m. and 5 p.m ...

According to a recent poll 29 of adults in a certain area

According to a recent poll, 29% of adults in a certain area have high levels of cholesterol. They report that such elevated levels "could be financially devastating to the regions healthcare system" and are a major conce ...

  • 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

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

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