| San Francisco Bread Company | ||||
| Demand (Q) | Price (P) | Competitor Price (Px) | Advertising (Ad) | Income (I) |
| 599,201 | $6.66 | $5.96 | $206,647.00 | $52,955.00 |
| 572,258 | $8.01 | $5.30 | $207,025.00 | $54,391.00 |
| 558,142 | $7.53 | $6.16 | $207,422.00 | $48,491.00 |
| 627,973 | $6.51 | $7.56 | $216,224.00 | $51,219.00 |
| 593,024 | $6.20 | $7.15 | $217,954.00 | $48,685.00 |
| 565,004 | $7.28 | $6.97 | $220,139.00 | $47,219.00 |
| 596,254 | $5.95 | $5.52 | $220,215.00 | $49,775.00 |
| 652,880 | $6.42 | $6.27 | $220,728.00 | $54,932.00 |
| 596,784 | $5.94 | $5.66 | $226,603.00 | $48,092.00 |
| 657,468 | $6.47 | $7.68 | $228,620.00 | $54,929.00 |
| 519,866 | $6.99 | $5.10 | $230,241.00 | $46,057.00 |
| 612,941 | $7.72 | $5.38 | $232,777.00 | $55,239.00 |
| 621,707 | $6.46 | $6.20 | $237,300.00 | $53,976.00 |
| 597,215 | $7.31 | $7.43 | $238,765.00 | $49,576.00 |
| 617,427 | $7.36 | $5.28 | $241,957.00 | $55,454.00 |
| 572,320 | $6.19 | $6.12 | $251,317.00 | $48,480.00 |
| 602,400 | $7.95 | $6.38 | $254,393.00 | $53,249.00 |
| 575,004 | $6.34 | $5.67 | $255,699.00 | $49,696.00 |
| 667,581 | $5.54 | $7.08 | $262,270.00 | $52,600.00 |
| 569,880 | $7.89 | $5.10 | $275,588.00 | $50,472.00 |
| 644,684 | $6.76 | $7.22 | $277,667.00 | $53,409.00 |
| 605,468 | $6.39 | $5.21 | $277,816.00 | $52,660.00 |
| 599,213 | $6.42 | $6.00 | $279,031.00 | $50,464.00 |
| 610,735 | $6.82 | $6.97 | $279,934.00 | $49,525.00 |
| 603,830 | $7.10 | $5.30 | $287,921.00 | $49,489.00 |
| 617,803 | $7.77 | $6.96 | $289,358.00 | $49,375.00 |
| 529,009 | $8.07 | $5.76 | $294,787.00 | $48,254.00 |
| 573,211 | $6.91 | $5.96 | $296,246.00 | $46,017.00 |
1. Using the excel data above answer the following questions.
|
SUMMARY OUTPUT |
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|
Regression Statistics |
||||||
|
Multiple R |
0.9308 |
|||||
|
R Square |
0.8664 |
|||||
|
Adjusted R Square |
0.8432 |
|||||
|
Standard Error |
13868.2389 |
|||||
|
Observations |
28 |
|||||
|
ANOVA |
||||||
|
df |
SS |
MS |
F |
Significance F |
||
|
Regression |
4.000 |
28692838225.528 |
7173209556.382 |
37.297 |
0.000 |
|
|
Residual |
23.000 |
4423545125.186 |
192328048.921 |
|||
|
Total |
27.000 |
33116383350.714 |
||||
|
Coefficients |
Standard Error |
t Stat |
P-value |
Lower 95% |
Upper 95% |
|
|
Intercept |
93833.8877 |
66959.6608 |
1.4013 |
0.1745 |
-44682.7242 |
232350.4995 |
|
Price (P) |
-19432.5811 |
3931.9650 |
-4.9422 |
0.0001 |
-27566.4704 |
-11298.6919 |
|
Competitor Price (Px) |
17711.9806 |
3359.2803 |
5.2726 |
0.000024 |
10762.7798 |
24661.1814 |
|
Advertising (Ad) |
0.2869 |
0.0940 |
3.0510 |
0.0057 |
0.0924 |
0.4815 |
|
Income (I) |
8.9996 |
0.9625 |
9.3505 |
0.0000 |
7.0086 |
10.9906 |
A. The p-value for competitors price is 0.000024. Yes it is statistically significant as the p-value is less than 0.05 and 0.01. If the p-value is less than 0.01, the probability of not getting the value is less than 1 percent
B. Equation is,
Demand = 93833.89-19432.58*P+17711.98*Px+0.2869*Ad+8.99*I
So, when the price of competitor is increased by $1.5 the demand for SF bread increases by 17711.98*1.5 = 26568 units
C. R^2, is the coefficient of determination which tells about the amount of variation explained by the model or equation. The value of 0.8664 means the model is able to capture 86.64 percent of variation in demand through price, competitor price, Advertising and Income
San Francisco Bread Company Demand (Q) Price (P) Competitor Price (Px) Advertising (Ad) Income (I) ...