Predicting Software Reselling Profits. Tayko Software is a software catalog firm that sells games and educational software. It started out as a software manufacturer and then added third-party titles to its offerings. It recently revised its collection of items in a new catalog, which it mailed out to its customers. This mailing yielded 2000 purchases. Based on these data, Tayko wants to devise a model for predicting the spending amount that a purchasing customer will yield. The file Tayko.csv contains information on 2000 purchases. Table 6.12 describes the variables to be used in the problem (the Excel file contains additional variables)

a. Explore the spending amount by creating a pivot table for the categorical variables and computing the average and standard deviation of spending in each category.

b. Explore the relationship between spending and each of the two continuous predictors by creating two scatterplots (Spending vs. Freq, and Spending vs.
last_update_days_ago). Does there seem to be a linear relationship?

c. To fit a predictive model for Spending:
i. Partition the 2000 records into training and validation sets.