"XYZ company is interested in quantifying the impact of consumer promotions on the sales of its packaged food product. XYZ has historical data on the following variables for 38 weeks:

• Sales: Weekly sales volume in thousands of units.
• Prom: Weekly spending on consumer promotions in thousands of Dollars"

"A regression analysis was applied to XYZ historical dataset. The dependent variable is weekly Sales and the independent variables are weekly Prom and weekly Lagged Prom (i.e., last week Prom). This is a summary of the regression output:
Sales = 0.80 + 1.20*Prom - 0.40*Lag(Prom)

• R-squared=0.85
• F-Statistic=23.83
• p-value=0.001 (for the overall regression)
•All regression coefficients are statistically significant at the 5% level."

A. What is the percent of variance in sales that is explained by Prom and Lag(Prom)?
B. Is the overall regression equation statistically significant at the 5% level? Give reasons for the same?
C. What is the net volume impact of an incremental $1000 spending per week on consumer promotions?
D. What will be the predicted sales volume ?
E. What is the gross margin of this net volume impact due to $1000 spending per week on consumer promotions, if brand makes $2.20 gross margin per unit .
F. What is the ROI of this promotion?
G. What is predicted sales volume in week 39 if XYZ did not promote in this week and the week before? 

Answer rating: 100% (QA)

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