Question

Clean Industries produces Fresh, a brand of liquid laundry detergent. In order to better manage its inventory and make revenue projections, the company would like to better predict the quantity demanded for its product. The company has gathered data concerning the quantity demanded for Fresh, along with variables believed to affect the demand for Fresh, over the last 30 sales periods. The following information was collected: Variable Description Name DEMAND sales pericd PRICE The quantity demanded for the large size bottle of Fresh (in hundreds of thousands of bottles) in the - Thepricel ndollars ofFreshas offered by Clean Industries in the sales period INDPRICEThe average industry price (in dollars) of competitors' similar detergents in the sales period Clean Industries' advertising expenditure (in hundreds of thousands of dollars) to promote Fresh in the sales period AD DEMAND S) (5)(5100,000) (100,000) Obs PRICE INDPRICE AD DEMAND PRICE INDPRICE AD DE Obs 13.85 2 3.75 7.38 16 3.80 3.80 4.00 4.30 3.70 6.80 7.10 7.00 6.80 6.50 17 3.70 4.20 9.26 9.00 8.75 3 3.70 4 3.70 5 3.60 6 3.60 73.60 7.50 19 3.70 4.10 9.33 20 3.80 3.75 8.75 22 3.75 3.65 7.1024 3.55 7.00 6.50 8.28 21 3.803.75 6.25 7.65 7.27 3.80 6.00 8 3.80 3.85 5.25 787 23 3.70 390 9 3.803.65 10 3.85 4.006.00 11 3.90 12 3.90 4.00 6.25 13 3.70 4.10 6508.00 3.65 7.00 6.80 6.80 6.50 5.75 5.80 8.75 9.21 8.0025 3.604.10 7.89 26 3.65 4.25 3.65 6.50 8.15 27 3.70 9.10 28 3.75 3.75 8.27 7.67 7.00 8.86 29 3.80 3.85 15 3.75 410 6,80 8.90 30 3.70 425680926 14 3.754.206.90 15 3.754.10 9.26 Clearly explain what type of relationship exists between the Demand for Fresh laundry detergent and its Price (based on a scatter diagram that you produce in Excel). a. b. Using the quick rule for significance of a correlation, demonstrate whether there is a statistically significant correlation between the Demand and Price? Calculate the sample correlation between these two variables using the "CORREL" function in Excel.

Answer 1