The following table shows Amazon's approximate net sales and operating expenses in 2011-2014. a. Use this information to find a linear regression model for Amazon's operating expense E (in billions of dollars) as a function of net sales S (in billions of dollars). Plot the data a regression line. b. Give the units of measurement and interpretation of the slope. c. What according to the model, would Amazon need to earn in net sales
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.
The following table shows Amazon's approximate net sales and operating expenses in 2011-2014.
a. Use this information to find a linear regression model for Amazon's operating expense E (in billions of dollars) as a
b. Give the units of measurement and interpretation of the slope.
c. What according to the model, would Amazon need to earn in net sales for its operating expenses to be $5 billion? Round to nearest billion.
d. Based on the graph, would you say the linear model is reasonable?
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