a)What is the statistical relationship shown in the Figure and list out 3 characteristics of this relationship? b) Work out the values of parameters of the relationship shown in the Figure (i.e. work out the equation of the relationship). c)Explain the relationship and make recommendation to Little Liu Ltd based on the information given.
Correlation
Correlation defines a relationship between two independent variables. It tells the degree to which variables move in relation to each other. When two sets of data are related to each other, there is a correlation between them.
Linear Correlation
A correlation is used to determine the relationships between numerical and categorical variables. In other words, it is an indicator of how things are connected to one another. The correlation analysis is the study of how variables are related.
Regression Analysis
Regression analysis is a statistical method in which it estimates the relationship between a dependent variable and one or more independent variable. In simple terms dependent variable is called as outcome variable and independent variable is called as predictors. Regression analysis is one of the methods to find the trends in data. The independent variable used in Regression analysis is named Predictor variable. It offers data of an associated dependent variable regarding a particular outcome.
Question 4
The below data represent the advertising expenditure and sales of Little Liu Ltd from year 2008 to 2017.
Table: Advertising Expenditure vs. Sales from 2008 to 2017
|
Year |
Advert. Expenditure |
Sales |
|
(x, £000) |
(y, £000) |
|
|
2008 |
8 |
30 |
|
2009 |
12 |
40 |
|
2010 |
11 |
29 |
|
2011 |
5 |
29 |
|
2012 |
14 |
43 |
|
2013 |
3 |
17 |
|
2014 |
6 |
20 |
|
2015 |
8 |
30 |
|
2016 |
4 |
22 |
|
2017 |
9 |
40 |
|
Total |
80 |
300 |
Figure:
a)What is the statistical relationship shown in the Figure and list out 3 characteristics of this relationship?
b) Work out the values of parameters of the relationship shown in the Figure (i.e. work out the equation of the relationship).
c)Explain the relationship and make recommendation to Little Liu Ltd based on the information given.
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