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    Meddicorp collected sales, advertising, and bonus data from 60 sales territories to analyze the effectiveness of their bonus program and impact of advertising on sales. Multiple linear regression models were developed using SPSS to predict sales. The best model included advertising and bonus amounts as significant predictors of sales. Question 2.1 The zero-order, partial, and part correlations for ADV in Model 1 are 0.891, 0.878, and 0.731 respectively. Zero-order is the simple correlation between the two variables. Partial correlation measures the correlation between ADV and SALES controlling for other variables (there are none in Model 1). Part correlation measures the unique contribution

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    Tut 3

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    vinothmuthu
    11 views4 pages
    Meddicorp collected sales, advertising, and bonus data from 60 sales territories to analyze the effectiveness of their bonus program and impact of advertising on sales. Multiple linear regression models were developed using SPSS to predict sales. The best model included advertising and bonus amounts as significant predictors of sales. Question 2.1 The zero-order, partial, and part correlations for ADV in Model 1 are 0.891, 0.878, and 0.731 respectively. Zero-order is the simple correlation between the two variables. Partial correlation measures the correlation between ADV and SALES controlling for other variables (there are none in Model 1). Part correlation measures the unique contribution

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    Meddicorp collected sales, advertising, and bonus data from 60 sales territories to analyze the effectiveness of their bonus program and impact of advertising on sales. Multiple linear regression models were developed using SPSS to predict sales. The best model included advertising and bonus amounts as significant predictors of sales. Question 2.1 The zero-order, partial, and part correlations for ADV in Model 1 are 0.891, 0.878, and 0.731 respectively. Zero-order is the simple correlation between the two variables. Partial correlation measures the correlation between ADV and SALES controlling for other variables (there are none in Model 1). Part correlation measures the unique contribution

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    11 views4 pages

    Tut 3

    Uploaded by

    vinothmuthu
    Meddicorp collected sales, advertising, and bonus data from 60 sales territories to analyze the effectiveness of their bonus program and impact of advertising on sales. Multiple linear regression models were developed using SPSS to predict sales. The best model included advertising and bonus amounts as significant predictors of sales. Question 2.1 The zero-order, partial, and part correlations for ADV in Model 1 are 0.891, 0.878, and 0.731 respectively. Zero-order is the simple correlation between the two variables. Partial correlation measures the correlation between ADV and SALES controlling for other variables (there are none in Model 1). Part correlation measures the unique contribution

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 4

    Meddicorp sells medical supplies to hospitals, clinics and doctors’ offices.

    The company currently markets in 3


    regions: South, West and North. These regions are divided into many smaller sales territories. Meddicorp’s sales
    manager is concerned about the effectiveness of a new bonus program that provides bonuses to salespersons
    based on their performance. He would like to know if the bonuses paid in 2018 were related to sales, taking the
    effect of advertising into account.

    Data on SALES (sales in thousands of dollars), ADV (advertising expenditure in hundreds of dollars) and BONUS
    (bonuses paid in hundreds of dollars) for 60 sales territories has been collected for 2018.

    Descriptive Statistics

    Mean Std. Deviation N

    SALES 1285.842 222.265 60


    BONUS 277.821 26.720 60
    ADV 520.535 70.227 60

    Correlation Matrix
    SALES ADV BONUS
    SALES 1
    ADV 0.891 1
    BONUS 0.554 0.396 1

    A multiple linear regression equation is developed using the Forward Method on SPSS and the model
    summary is given below:

    Model 1 and 2 Summaryc

    Model R R Square Adjusted R Std. Error of the


    Square Estimate

    1 .891a .794 .790 101.8198


    2

    a. Predictors: (Constant), ADV c. Dependent Variable: SALES


    b. Predictors: (Constant), ADV, BONUS

    Model 1 and 2 Coefficientsa


    Models Unstandardized Standardized t Sig. Correlations
    Coefficients Coefficients

    B Std. Beta Zero- Partial Part


    Error order

    1 (Constant) -181.89 99.130 -1.835 .072

    ADV 2.820 .189 .891 14.938 .000

    2 (Constant) -576.70 129.433 -4.456 .000

    ADV 2.521 .182 13.868 .000 .891 .878 .731

    BONUS 1.981 .478 .554 .481 .219

    a. Dependent Variable: SALES


    Question 2.1
    What are the values of zero-order, partial and part correlation for ADV in Model 1 above? Explain.

    Question 2.2
    What percentage of the variation in SALES is explained by Model 2?

    Question 2.3
    Conduct an appropriate hypothesis test at a 95% confidence level to decide if BONUS is a significant
    variable? State the hypothesis clearly.

    Question 2.4
    Which of the variables, ADV or BONUS, has a greater impact on SALES in Model 2? Show all work.

    Question 2.5
    Compare the coefficient of ADV in Models 1 and 2 and comment on the decrease in the value. What
    is the likely reason for the decrease?

    Question 2.6
    Calculate the VIF for ADV and BONUS in Model 2. What do these values imply?

    Meddicorp’s sales manager believes that in addition to ADV and BONUS, two other variables might be
    important in explaining the variation in SALES. These are:

    MKTSHR – Market share currently held by Meddicorp in each territory


    COMPET – largest competitor’s sales in each territory

    A regression model is developed (Model 3) using the ENTER method to predict SALES with all the 4
    explanatory variables. The SPSS model summary is given below:

    Model 3 Summaryb

    Model R R Square Adjusted R Std. Error of the


    Square Estimate

    .919a .844 .833 90.86720

    a. Predictors: (Constant), COMPET, BONUS, MKTSHR, ADV


    b. Dependent Variable: SALES
    Model 3 ANOVAa

    Model Sum of Squares df Mean Square F Sig.

    Regression 2460583.610 4 615145.903 74.501 .000b

    Residual 454126.635 55 8256.848

    Total 2914710.246 59

    a. Dependent Variable: SALES


    b. Predictors: (Constant), COMPET, BONUS, MKTSHR, ADV
    Model 3 Coefficientsa

    Standardized
    Unstandardized Coefficients Coefficients
    Std.
    Model B Error Beta t Sig.
    (Constant) -662.385 170.294 -3.890 .000
    BONUS 1.997 .483 .240 4.137 .000
    ADV 2.523 .204 .797 12.395 .000
    MKTSHR 2.761 3.058 .051 .903 .370
    COMPET -.009 .237 -.003 -.040 .968
    a. Dependent Variable: SALES

    Question 2.7
    Perform an appropriate hypothesis test at 95% confidence level to determine if in addition to ADV and
    BONUS, the variables MKTSHR and COMPET are important in explaining the variation in SALES.

    A 4th model is developed (Model 4) taking COMPET, BONUS and ADV as the independent variables, and
    the regression summary is given below:

    Model 4 Summaryb

    Model R R Square Adjusted R Std. Error of the


    Square Estimate

    .918a .842 90.71747

    a. Predictors: (Constant), COMPET, BONUS, ADV


    b. Dependent Variable: SALES
    Model 4 Coefficientsa

    Standardized
    Unstandardized Coefficients Coefficients
    Std.
    Model B Error Beta t Sig.
    (Constant) -566.744 133.140 -4.257 .000
    BONUS 1.979 .481 .238 4.110 .000
    ADV 2.552 .201 .806 12.715 .000
    COMPET -.083 .222 -.022 -.372 .711

    a. Dependent Variable: SALES

    Question 2.8
    Calculate the Adjusted R Square value for Model 3. Compare the R square and Adjusted R square
    values for Models 2 and 3 and comment on the change in these values.
    Question 2.9
    Which of the 4 models above is the most appropriate for predicting SALES? Explain clearly.

    Question 2.10
    Use the model chosen above to predict SALES given:
    ADV = 530, BONUS = 300, Stamp = 5, MKTSHR = 25, COMPET = 350

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