Question: Below are some data from a local pizza parlor on gross sales (SALES), promotion dollars (PROMO) and type of promotion used. The parlour uses only
- Below are some data from a local pizza parlor on gross sales (SALES), promotion dollars (PROMO) and type of promotion used. The parlour uses only 3 types of promotions: -Radio, flyers and newspapers. The parlor used only one type of promotion in any given week. The variables Type1 and Type2 have been coded:
TYPE1 = 1 if radio was used, 0 otherwise
TYPE2 =1 if flyer was used, 0 otherwise
(Hint: This is a problem of dummy variable)
| SALES in ('100s) | Promo in 100s | TYPE1 | TYPE2 |
| 12.1 | 3.8 | 0 | 1 |
| 19.1 | 6.4 | 0 | 1 |
| 26.9 | 7.9 | 0 | 0 |
| 24.8 | 8.7 | 1 | 0 |
| 37.1 | 12.4 | 1 | 0 |
| 39.4 | 15.9 | 0 | 1 |
| 32.5 | 11.3 | 0 | 0 |
| 28.9 | 9.4 | 0 | 0 |
| 28.8 | 8.6 | 1 | 0 |
| 34.7 | 12.7 | 0 | 1 |
| 38.4 | 14.3 | 0 | 0 |
| 26.3 | 6.7 | 1 | 0 |
- Predict sales from Promo, type 1 and type 2 and state the fitted regression equation
- If Promo is held constant (controlling for promo) is there a significant difference between radio and newspaper at 5% significance level
- If Promo is held constant (controlling for promo) is there a significant difference between flyer and newspaper at 5% significance level
- What is the sales when $800 dollar is spent in advertisements through radio advertisements? Calculate 90% confidence interval.
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