Carpet City wants to develop a means to forecast its carpet sales. The store manager believes that the store’s sales are directly related to the number of new housing starts in town. The manager has gathered data from county records on monthly house construction permits and from store records on monthly sales. These data are as follows: Monthly Carpet Sales (1,000 yd.) Monthly Construction Permits 5 21 10 35 4 10 3 12 8 16 2 9 12 41 11 15 9 18 14 26 Develop a linear regression model for these data, and forecast carpet sales if 30 construction permits for new homes are filed. Determine the strength of the causal relationship between monthly sales and new home construction by using correlation.
Carpet City wants to develop a means to forecast its carpet sales. The store manager believes that the store’s sales are directly related to the number of new housing starts in town. The manager has gathered data from county records on monthly house construction permits and from store records on monthly sales. These data are as follows: Monthly Carpet Sales (1,000 yd.) Monthly Construction Permits 5 21 10 35 4 10 3 12 8 16 2 9 12 41 11 15 9 18 14 26 Develop a linear regression model for these data, and forecast carpet sales if 30 construction permits for new homes are filed. Determine the strength of the causal relationship between monthly sales and new home construction by using correlation.
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter13: Regression And Forecasting Models
Section: Chapter Questions
Problem 40P: The Baker Company wants to develop a budget to predict how overhead costs vary with activity levels....
Related questions
Question
Carpet City wants to develop a means to
Monthly Carpet Sales (1,000 yd.) |
Monthly Construction Permits |
5 |
21 |
10 |
35 |
4 |
10 |
3 |
12 |
8 |
16 |
2 |
9 |
12 |
41 |
11 |
15 |
9 |
18 |
14 |
26 |
- Develop a linear regression model for these data,
- and forecast carpet sales if 30 construction permits for new homes are filed.
- Determine the strength of the causal relationship between monthly sales and new home construction by using correlation.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 5 steps with 3 images
Recommended textbooks for you
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Contemporary Marketing
Marketing
ISBN:
9780357033777
Author:
Louis E. Boone, David L. Kurtz
Publisher:
Cengage Learning
Marketing
Marketing
ISBN:
9780357033791
Author:
Pride, William M
Publisher:
South Western Educational Publishing
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Contemporary Marketing
Marketing
ISBN:
9780357033777
Author:
Louis E. Boone, David L. Kurtz
Publisher:
Cengage Learning
Marketing
Marketing
ISBN:
9780357033791
Author:
Pride, William M
Publisher:
South Western Educational Publishing