As an e-commerce retailer, you have obtained some information from several comparable competitors regarding their levels of
Question:
As an e-commerce retailer, you have obtained some information from several comparable competitors regarding their levels of advertising expenditures and their sales. If you have a goal for $750,000 in sales next year, use regression to determine the best amount of advertising dollars you should invest to hit your goal.
Online Store | Monthly E-commerce Sales (in 1000 s) | Online Advertising Dollars (1000 s) |
1 | 368 | 1.7 |
2 | 340 | 1.5 |
3 | 665 | 2.8 |
4 | 954 | 5 |
5 | 331 | 1.3 |
6 | 556 | 2.2 |
7 | 376 | 1.3 |
Given the historical data of company sales, using linear regression, make a prediction for 2020 sales revenue.
Year | Sales (In millions) |
2012 | 2.611 |
2013 | 2.688 |
2014 | 3.022 |
2015 | 3.133 |
2016 | 3.743 |
2017 | 3.698 |
2018 | 3.997 |
2019 | 4.436 |
Develop a brief memorandum to management summarizing your projections with appropriate support. Advise management about the relative risk of relying on historical sales trends to predict sales in recent years. Be sure to describe your linear model and its limitations. Can you say anything about the cause-effect relationship between the variables in the correlation analysis? Advise management on what conditions might call for revisiting the prediction.
International Marketing And Export Management
ISBN: 9781292016924
8th Edition
Authors: Gerald Albaum , Alexander Josiassen , Edwin Duerr