OMGT 3223 Homework #4

As always, all instructions apply for homework assignments (see original homework #1). Please show all work, formulae, and answers. In addition, please explain all answers fully to receive full credit.

 

1. From the following data set in Table 1.1 compute a Linear Regression Model.

Table 1.1

 

Year
Sales ($000)
Ads ($000)
# Sales Force
Error
Abs.Error
1986
61.89

4.1

101

.

.
1987
73.74

5.3

132

.

.
1988
81.19

6.7

175

.

.
1989
97.52

8.1

189

.

.
1990
86.50

7.6

181

.

.
1991
83.18

7.2

178

.

.
1992
87.05

7.9

187

.

.
1993
84.79

7.3

176

.

.
1994
73.49

5.4

142

.

.
1995
76.23

5.5

149

.

.
1996
96.54

8.0

190

.

.
1997
95.08

7.9

186

.

.
1998
87.05

7.8

184

.

.
1999
96.02

8.2

195

.

.
2000
98.90

8.6

200

.

.
2001
83.23

7.2

177

.

.
2002

.

.

.

.

.

 

a. What is the linear regression equation for sales?

 

 

 

b. Calculate the MAD for the linear regression forecasting method.

 

 

 

c. If ad expenditures are expected to be $6.8 ($000) and the sales force is expected to be around 190, what would the expected level of sales be (Hint: use your LR model from a.)

 

 

MAD =