A company that holds the DVD distribution rights to movies previously released only in theaters has the

Question:

A company that holds the DVD distribution rights to movies previously released only in theaters has the business objective of developing estimates of the sales revenue of DVDs. Toward this goal, a company analyst plans to use box office gross to predict DVD sales revenue. For 26 movies, the analyst collects the box office gross (in $ millions) in the year that they were released and the DVD revenue (in $ millions) in the following year and stores these data in Movie. (Data extracted from “ Annual Movie Chart–2012,” bit.ly/1kVJIF3 and “ Top Selling DVDs in the United States 2013,” bit.ly/UpTep9.) For these data,

a. Construct a scatter plot.

b. Assuming a linear relationship, use the least squares method to determine the regression coefficients b0 and b1.

c. Interpret the meaning of the slope, b1, in this problem.

d. Predict the mean sales revenue for a movie DVD that had a box office gross of $ 100 million.

e. What conclusions can you reach about predicting DVD revenue from movie gross?

Distribution
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