SOLVED PROBLEM 4.7 SALES, y ADVERTISING, x Cengiz Haksever runs an Istanbul high-end jewelry shop. He advertises weekly in local Turkish newspapers and is thinking of increasing his ad budget. Before doing so, he decides to eval- uate the past effectiveness of these ads. Five weeks are sampled and the data are shown in the table below: 11 5 25 55 6 3 9 18 10 49 70 6 4 12 12 64 96 y45 x25 E151 251 AD BUDGET SALES ($1,000s) THAT WEEK ($100s) 45 = 9 25 = 5 11 6 3 251 (55)9 151 (5K5 Z - 10 7 6 251 225 26 12 8 151 125 26 Develop a regression model to help Cengiz evaluate his advertising a b 9 (1(5)-4 So the regression model is f 4lx, or Sales (in S1,000s) 4+1 (Ad budget in S100s) This means that for each 1-unit increase inx (or $100 in ads) sales increase by 1 unit (or S1,000). SOLUTION We apply the least-squares regression model as we did in Example 12