Case Background: You are a marketing manager for Sunflower Moving Company, a company that helps people move their belongings from one residence to another. As part of the company's efforts to remain competitive, a study is implemented to examine factors that drive the sales of its moving services and products.Instructions:In addition to offering moving services, Sunflower Moving Company also sells moving supplies such as boxes, packing supplies, tie-down ropes, covers and bags, short-term storage options, bike racks, wheelchair carriers, motorcycle towing, etc. An initial study was conducted to examine the relationship between the sales levels of Sunflower's moving supplies and the price of its products. A regression model yielded an R-Square value of 45%. Interpret this statistic. Do you think this statistic indicates that Price is a good predictor of Sales? Justify your answer.You direct your market research team to expand the study. Besides Price, suggest 3 other predictor variables (independent variables) that could be considered to help explain or predict the sales level of Sunflower's moving supply products. Consider both numeric and categorical variables as possible predictor variables. Defend your answer.

1 If the regression model has independent variables that are of the utmost importance for the dependent variable, then the R square value must be higher. Higher R square value indicates that the independent variable directly correlates with the dependent variable and changes in the independent variable will result in the shift in the dependent variable. Higher R square value indicates and signifies that the regression model explains a good proportion of variability in the dependent variable. A regression model with the R square value of 45% is considered to have lower value and it indicates that the independent variables are correlated with the dependent variable, but they do not explain much of variability in dependent variable. It means that price is a predictor of sales but it does not signify much of the variability in the dependent variable which is sales in this case as lower R square value indicates that the independent variable value is highly scattered away from the mean regression equation line. 2 Besides price, the other three variables that may affect the sales of the moving supply products are: Quality of the product Brand of the product Spending capacity or buying capacity of the customer. The above-stated variables have direct proportionality with the dependent variable which is sales in this case. For each of these independent variables, R square value needs to be above 85% which would signify that the values of these independent variables are around its mean value and that these variables would have much of the variability in the dependent variable.

Answered: You are a marketing manager for…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

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Case Background: You are a marketing manager for Sunflower Moving Company, a company that helps people move their belongings from one residence to another. As part of the company's efforts to remain competitive, a study is implemented to examine factors that drive the sales of its moving services and products.

Instructions:

In addition to offering moving services, Sunflower Moving Company also sells moving supplies such as boxes, packing supplies, tie-down ropes, covers and bags, short-term storage options, bike racks, wheelchair carriers, motorcycle towing, etc. An initial study was conducted to examine the relationship between the sales levels of Sunflower's moving supplies and the price of its products. A regression model yielded an R-Square value of 45%. Interpret this statistic. Do you think this statistic indicates that Price is a good predictor of Sales? Justify your answer.
You direct your market research team to expand the study. Besides Price, suggest 3 other predictor variables (independent variables) that could be considered to help explain or predict the sales level of Sunflower's moving supply products. Consider both numeric and categorical variables as possible predictor variables. Defend your answer.

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