PMBA 6331 Problem Set 5

Question 1:Market planning, Inc. a marketing research firm, has obtained the prescription sales data for 20 independent pharmacies (attached).In this table y is the average weekly prescription sales over the past year (in units of $1,000), x₁ is the floor space (in square feet), x₂ is the percentage of floor space allocated to the prescription department, x₃ is the number of parking spaces available to the store, x₄ is the weekly per capita income for the surrounding community (in units of $100), and x₅ is a dummy variable that equals 1 if the pharmacy is located in a shopping center and 0 otherwise.Regress average weekly prescription sales against different combinations of the independent variables.What is the best model?Discuss what the parameter coefficients say about prescription sales.

Question 2: The quarterly sales of the TRK-50 mountain bike for the previous four years by a bicycle shop in Switzerland (attached).Use Stata to generate a scatter plot of sales versus time.Next, use Stata to estimate the following model

a.From your scatter, what type of trend appears to exist?

b.From your scatter, what type of seasonal variation appears to exist?

c.Based on your regression results, are all of the independent variables important?

d.Write the prediction equation for the model and use it to calculate and .

e.Test for positive autocorrelation using the DW statistic with a 5 percent level of significance.