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BE Assignment#3

This document contains a homework assignment analyzing the relationship between annual sales, advertisement on electronic media, and advertisement on print media for a company from 2010-2019. It finds that annual sales has a strong positive correlation with both advertising variables. Advertisement on print media has a slightly stronger influence on annual sales than electronic media. The regression model predicts that with advertising expenditures of BDT 45 crore on electronic media, annual sales in 2020 would be approximately BDT 582.3 crore.

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Nowsheen Noor
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68 views4 pages

BE Assignment#3

This document contains a homework assignment analyzing the relationship between annual sales, advertisement on electronic media, and advertisement on print media for a company from 2010-2019. It finds that annual sales has a strong positive correlation with both advertising variables. Advertisement on print media has a slightly stronger influence on annual sales than electronic media. The regression model predicts that with advertising expenditures of BDT 45 crore on electronic media, annual sales in 2020 would be approximately BDT 582.3 crore.

Uploaded by

Nowsheen Noor
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Business Economics

(MBA 510E)

Homework # 3

Submitted by:
Nowsheen Noor
ID # 1921251

Submitted to:
Prof. Faizul Latif Chowdhury
Advertisement on Advertisement on
Year Annual Sales
Electronic Media Print Media
BDT (Crore) BDT (Crore) BDT (Crore)
2010 440 11 1
2011 460 11 2
2012 490 14 2
2013 520 16 3
2014 540 29 4
2015 570 21 5
2016 600 24 5
2017 610 29 5
2018 630 35 6
2019 650 42 6

a) In the table above, the Annual Sales of Magpie is the dependent variable, whereas
Advertisement on Electronic Media is the independent variable. This is because the sales
will vary depending on the changes of the various factors or variable, and one of the factors
is advertisement on electronic media. However, the ads are independent because it will not be
effected by itself or by other variable, rather it will affect the sales to change. Hence, it is an
independent variable.

b) The Regression model examines the influence of one or more independent variables on a
dependent variable. The model consists of one dependent variable and one or more
independent variables. In this case, there are two independent variables (Advertisement on
Electronic Media & Advertisement on Print Media), and one dependent variable (Annual
Sales)

c)
Model Summary
Adjusted R Std. Error of the
Model R R Square Square Estimate
1 .984a .968 .959 14.723
a. Predictors: (Constant), Ads_PM, Ads_EM

The R square (R2) is considered for evaluating the acceptability of the model. Its value ranges
from 0 to 1. In this model, the value of R 2 is 0.968, or 96.6%, which is very high (1 being its
highest value). However, when there is more than one independent variable, the value of R 2 is
found to increase. Adjusted R2 calculates R2 from only those variables which have significant
influence on the dependent variable. If the difference between R2 and adjusted R2 in not too
much, it means that there were no irrelevant variables included, which is the situation for this
case. The R2 is 96.8% and adjusted R2 is 95.58%. Therefore, the difference is very close.

ANOVAa
Sum of
Model Squares df Mean Square F Sig.
1 Regression 46172.633 2 23086.317 106.503 .000b
Residual 1517.367 7 216.767
Total 47690.000 9
a. Dependent Variable: Annual_Sales
b. Predictors: (Constant), Ads_PM, Ads_EM

The value of F represents the ratio of outcome being right to that of the chances of being
wrong. There is no ideal value of F. In this case, the value of F is 103.503. The significance
of F is .000, which indicates that the probability of mis-specification or probability of wrong
choice of the model is nil.

Coefficientsa
Standardized
Unstandardized Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) 392.231 11.980 32.742 .000
Ads_EM 1.294 1.046 .187 1.237 .256
Ads_PM 33.011 6.153 .813 5.365 .001
a. Dependent Variable: Annual_Sales

The constant or the estimated value of the constant is 393.231, which means it will be sold
irrespective of the independent variables.
The value of Advertisement on Electronic Media is 1.294, which means that the sales will
increase by 12,940,000 due to Advertisement on Electronic Media.
The value of Advertisement on Print Media is 33.011, which means that the sales will
increase by 330,110,000 due to Advertisement on Print Media.

d) Y = a+bx2020
= 392.231+ (1.294*45)
= BDT 582,300,000 (Ans)

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