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

A repeated-measures experiment comparing only two

A repeated-measures experiment comparing only two treatments can be evaluated with either a t statistic or an ANOVA. As we found with the independent-measures design, the t test and the ANOVA produce equivalent conclusio ...

1 why must researchers ensure that their experimental

1. Why must researchers ensure that their experimental groups are roughly equivalent before manipulating the independent variable? 2. Discuss the relative advantages and disadvantages between within-subjects designs and ...

Satistics project come up with a survey pick a population

Statistics Project: Come up with a survey: Pick a population Come up with 4 variablesà 2 Quantitative & 2 Qualitative (make up numbers) Pick 50 data points for each variable, make a table on excel, use a scatter plot gra ...

Question 1use this extract taken from the article goji

Question 1: Use this extract taken from the article, "Goji berries prevent macular degeneration," (appeared in Healthy Foods, Healthy Bodies on January 21, 2016) to answer the questions that follow: Goji berries (Lycium ...

On a 2-d regular not wrapped-around mesh a message from a

On a 2-D regular (not wrapped-around) mesh, a message from a source (X s , Y s ) is to be sent to a destination (X d , Y d ). If any shortest path can be used, what is the probability that the message follows the shortes ...

Records show that 13 of all college students are foreign

Records show that 13% of all college students are foreign students who also smoke. It is also known that 25% of all foreign college students smoke. What percent of the students at this university are foreign?

A business student is interested in estimating the 99

A business student is interested in estimating the 99% confidence interval for the proportion of students who bring laptops to campus. He wishes a precise estimate and is willing to draw a large sample that will keep the ...

Suppose amongst all the families on a caribbean cruise the

Suppose amongst all the families on a Caribbean Cruise, the population variance of the number of children per family is 4. If we were to take a sample of 10 families, then the probability is .9 that the sample variance i ...

If the slope of a straight line is 23 and correlation

If the slope of a straight line is 2.3 and correlation coefficient is 0.777, calculate coefficient of determination.

Part a - excel instructions for chi-square tests carrying

Part A - Excel Instructions for Chi-square Tests Carrying out Chi-square (χ 2 ) tests of independence We are considering prisoner behaviour data. There is a prison with six wings each with 100 prisoners. Prisoner behavio ...

  • 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