An electronics company is looking to develop a regression model to predict the number of units sold for a special running watch. Data is provided below: Sales (units) Price ($) Advertising ($) Holiday 500 100 50 Yes 480 120 40 Yes 485 110 45 No 510 103 55 Yes 490 108 40 No 488 109 30 No 496 106 45 Yes Compile an excel spreadsheet for the above data and determine the regression equation Answer (a) X3 = 1 if it is a holiday and 0 if not. (b) 0.4670

Answers:

Y = 596.02 - 1.09X1 +0.28X2 + 4.34X3 where X1 = Price, X2 = Advertising, X3 = Dummy Variable for Holiday

Y = 596.02 + 1.09X1 +0.28X2 + 4.34X3 where X1 = Price, X2 = Advertising, X3 = Dummy Variable for Holiday

Y = 59.62 - 1.09X1 +0.28X2 + 4.34X3 where X1 = Price, X2 = Advertising, X3 = Dummy Variable for Holiday

596.02 - 0.28X1 + 1.09X2 + 4.34X3 where X1 = Price, X2 = Advertising, X3 = Dummy Variable for Holiday