The Manufacturer of a Light Fixture Believes That the Dollars

Essay

The manufacturer of a light fixture believes that the dollars spent on advertising,the price of the fixture,and the number of retail stores selling the fixture in a particular month influence the light fixture sales.The manufacturer randomly selects 10 months and collects the following data: $$\begin{array} { l l l l } \text { Sales } & \text { Advertising } & \text { Price } & \text { \# of stores } \\41 & 20 & 40 & 1 \\42 & 40 & 60 & 3 \\59 & 40 & 20 & 4 \\60 & 50 & 80 & 5 \\81 & 50 & 10 & 6 \\80 & 60 & 40 & 6 \\100 & 70 & 20 & 7 \\82 & 70 & 60 & 8 \\101 & 80 & 30 & 9 \\110 & 90 & 40 & 10\end{array}$$ The sales are in thousands of units per month,the advertising is given in hundreds of dollars per month,the price is the unit retail price for the particular month.Using this data,the following computer output is obtained.
The regression equation is
Sales = 31.0 + 0.820 Advertising - 0.325 Price + 1.84 Stores $$\begin{array} { l l l l l } \text { Predictor } & \text { Coef } & \text { StDev } & \text { T } & \text { P } \\\text { Constant } & 30.992 & 7.728 & 4.01 & 0.007 \\\text { Advertising } & 0.8202 & 0.5023 & 1.63 & 0.154 \\\text { Price } & - 0.32502 & 0.08935 & - 3.64 & 0.011 \\\text { Stores } & 1.841 & 3.855 & 0.48 & 0.650\end{array}$$ S = 5.465R-Sq = 96.7%R-Sq(adj)= 95.0%
Analysis of Variance $$\begin{array} { l l l l l l } \text { Source } & \text { DF } & \text { SS } & \text { MS } & \text { F } & \text { P } \\\text { Regression } & 3 & 5179.2 & 1726.4 & 57.81 & 0.000 \\\text { Residual Error } & 6 & 179.2 & 29.9 & & \\\text { Total } & 9 & 5358.4 & & &\end{array}$$
-Based on the observed data and the multiple regression model given above,estimate the average monthly light fixture sales and calculate the value of the residual,if the company spends $4000 on advertising,the price of the fixture is $60 and the fixture is being sold at 3 retail stores.