Yummy Lunch Restaurant needs to decide the most profitable location for their business expansion Marketing manager plans to use a multiple regression model to achieve their target His model considers yearly revenue as the dependent variable He found that number of people within 2KM (People), Mean household income(income), no of competitors and price as explanatory variables of company yearly revenue The following is the descriptive statistics and regression output from Excel Revenue People Income Competitors Price Mean 343965 68 5970 26 41522 96 2 8 5 68 Standard Error 5307 89863 139 0845281 582 1376385 0 142857 0 051030203 Median 345166 5 6032 41339 5 3 5 75 Mode N A 5917 N A 3 6 Standard Deviation 37532 51115 983 47613 4116 334718 1 010153 0 360838027 Sample Variance 1408689393 967225 2984 16944211 51 1 020408 0 130204082 Sum 17198284 298513 2076148 140 284 Count 50 50 50 50 50 SUMMARY OUTPUT Regression Statistics Multiple R 0 77 R Square A Adjusted R Square B Standard Error 25139 79 Observations 50 00 ANOVA df SS MS F Significance F Regression C 40585376295 F H 3 0831E 08 Residual D 28440403984 G Total E 69025780279 Coefficients Standard Error t Stat P value Intercept 68363 1524 78524 7251 0 8706 0 3886 People 6 4394 3 7051 I 0 0891 Income 7 2723 0 9358 J 0 0000 Competitors 6709 4320 3818 5426 K 0 0857 Price 15968 7648 10219 0263 L 0 1251 You are required to a Complete the missing entries from A to L in this output (2 marks) ANSWER b Derive the regression model (1 mark) ANSWER c What does the standard error of estimate tell you about the model (1 mark) ANSWER d Assess the independent variables significance at 5 level (develop hypothesis if necessary in the analysis) (3 marks) ANSWER Question 6(7 marks) Anita Limited has shared their annual sales revenue over the last 6 financial years from 2015 to 2020 Year Sales ($ 000) 2015 4500 2016 5100 2017 4900 2018 5400 2019 5670 2020 6000 You are required to a Using linear trend equation forecast the sales revenue of Anita Limited for 2021 (5 marks) ANSWER b Calculate the forecasted sales difference if you use3 period weighted moving average designed with the following weights 2018 (0 1), 2019 (0 3) and 2020(0 6) (2 marks) ANSWER

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Yummy Lunch Restaurant needs to decide the most profitable location for their business expansion. Marketing manager plans to use a multiple regression model to achieve

Yummy Lunch Restaurant needs to decide the most profitable location for their business expansion. Marketing manager plans to use a multiple regression model to achieve their target. His model considers yearly revenue as the dependent variable. He found that number of people within 2KM (People), Mean household income(income), no of competitors and price as explanatory variables of company yearly revenue.

The following is the descriptive statistics and regression output from Excel.

Revenue

People

Income

Competitors

Price

Mean

343965.68

5970.26

41522.96

2.8

5.68

Standard Error

5307.89863

139.0845281

582.1376385

0.142857

0.051030203

Median

345166.5

6032

41339.5

5.75

Mode

#N/A

5917

#N/A

Standard Deviation

37532.51115

983.47613

4116.334718

1.010153

0.360838027

Sample Variance

1408689393

967225.2984

16944211.51

1.020408

0.130204082

Sum

17198284

298513

2076148

140

284

Count

SUMMARY OUTPUT

Regression Statistics

Multiple R

0.77

R Square

Adjusted R Square

Standard Error

25139.79

Observations

50.00

ANOVA

Significance F

Regression

40585376295

3.0831E-08

Residual

28440403984

Total

69025780279

Coefficients

Standard Error

t Stat

P-value

Intercept

-68363.1524

78524.7251

-0.8706

0.3886

People

6.4394

3.7051

0.0891

Income

7.2723

0.9358

0.0000

Competitors

-6709.4320

3818.5426

0.0857

Price

15968.7648

10219.0263

0.1251

You are required to;

a.Complete the missing entries from A to L in this output (2 marks)

ANSWER:

b.Derive the regression model(1 mark)

ANSWER:

c.What does the standard error of estimate tell you about the model?(1 mark)

ANSWER:

d.Assess the independent variables significance at 5% level (develop hypothesis if necessary in the analysis)? (3 marks)

ANSWER:

Question 6(7 marks)

Anita Limited has shared their annual sales revenue over the last 6 financial years from 2015 to 2020.

Year

Sales ($ 000)

2015

4500

2016

5100

2017

4900

2018

5400

2019

5670

2020

6000

You are required to;

a.Using linear trend equation forecast the sales revenue of Anita Limited for 2021. (5 marks)

ANSWER:

b.Calculate the forecasted sales difference if you use3-period weighted moving average designed with the following weights:2018 (0.1), 2019 (0.3) and 2020(0.6).(2 marks)

ANSWER: