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Run a regression of Walmart Sales (y) on CPI, Retail Price Index, and December. Use the equation to predict Walmart's sales in a year when

Run a regression of Walmart Sales (y) on CPI, Retail Price Index, and December.

  1. Use the equation to predict Walmart's sales in a year when the CPI is 600, the retail price index is 400,000, and it is September.
  2. Repeat (1) assuming the month is December. How much does the prediction change?
  3. In managerially relevant terms, interpret the coefficient of December and its confidence interval.

(15 points) Can you improve the model created in number 6?If so, explain how and the fit your new model. Describe the results from your model below. How did it improve? What are the managerially relevant details?

Date Sales ($B) CPI Retail Price Index December
11/28/2003 14.764 552.7 301337 0
12/30/2003 23.106 552.1 357704 1
1/30/2004 12.131 554.9 281463 0
2/27/2004 13.628 557.9 282445 0
3/31/2004 16.722 561.5 319107 0
4/29/2004 13.98 563.2 315278 0
5/28/2004 14.388 566.4 328499 0
6/30/2004 18.111 568.2 321151 0
7/27/2004 13.764 567.5 328025 0
8/27/2004 14.296 567.6 326280 0
9/30/2004 17.169 568.7 313444 0
10/29/2004 13.915 571.9 319639 0
11/29/2004 15.739 572.2 324067 0
12/31/2004 26.177 570.1 386918 1
1/21/2005 13.17 571.2 293027 0
2/24/2005 15.139 574.5 294892 0
3/30/2005 18.683 579 338969 0
4/29/2005 14.829 582.9 335626 0
5/25/2005 15.697 582.4 345400 0
6/28/2005 20.23 582.6 351068 0
7/28/2005 15.26 585.2 351887 0
8/26/2005 15.709 588.2 355897 0
9/30/2005 18.618 595.4 333652 0
10/31/2005 15.397 596.7 336662 0
11/28/2005 17.384 592 344441 0
12/30/2005 27.92 589.4 406510 1
1/27/2006 14.555 593.9 322222 0
2/23/2006 18.684 595.2 318184 0
3/31/2006 16.639 598.6 366989 0
4/28/2006 20.17 603.5 357334 0
5/25/2006 16.901 606.5 380085 0
6/30/2006 21.47 607.8 373279 0
7/28/2006 16.542 609.6 368611 0
8/29/2006 16.98 610.9 382600 0
9/28/2006 20.091 607.9 352686 0
10/20/2006 16.583 604.6 354740 0
11/24/2006 18.761 603.6 363468 0
12/29/2006 28.795 604.5 424946 1
1/26/2007 20.473 606.348 332797 0

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