Dunng the course of operation, businesses accumulate all kinds of data such as numbers related to sales performance and profit: and mfonnation about clients. Finns often seek out employees mth strong math skills because data analysis provides Insight that improves busmess decisions. Linear regression a common t3ve of statistical meod that has several applications in Evaluating Trends and Sales Estimates Linear regressions can be used in business to evaluate trends and make estimates or forecasts _ For example, if a company's sales have mcreas&d steadily every month for the past few years, conducting a linear analysis on die sales data monthly sales on the y-axis and time on the x- would produce a Ime that depicts the upward trend m sales. Aner creating the trend line, the company could use die slope of ffe Ime to forecast sales in future months. Analyzing the Impact of Price Changes Linear regression can also be uwd to analyze the effect of pricmg on connumer behavior. For instance, if a company changes die price of a catain product several time: it can record the quantity it sells for each price level and then perfonns a Imeu regress Ion With quantity sold as the dependent variable and price as the explanatory vmabl& The result would be a line that depicts the extent to which consumers reduce their consumption of the product as prices increase, which could help guide frture pricing decisiom Assessing Risk Linear regression can be used to analyze nsk For example a health Insurance company might conduct a linear regremon plotting number of claims per customer against age and discover that older customers tend to make more health insurance claims. The results of such an analysis might guide Imponant business decmons made to account for risk. See the Imk here: http://smallbusiness_chron.com/ways-Imear-regresslon-can-appIied-busmess-settings-35431 html I. Can you think of other examples where linear regression applications can be used to help firms in improving business? There are cases where management can misuse regression to make business decmons_ One example the VANI in New York. See the link below: 2. Can you think of other instances where the use of regression analvsis should be limited in an applied business settinz? What lessons can be learned from the VAM example in New York?