A consumer electronics company has adopted an aggressive policy to increase sale

sales rapidly. Below varibles presents the sales, the number of employed salesmen,
advertisement and the number of salesmen of sales and predict sales of a comp

Sales (in
Advertisemnet (in
Months thousands Salesmen
thousands rupees)
rupees) (X1)
(X2)
(Y)
1 5000 25 180
2 5200 35 250
3 5700 15 150
4 6300 27 240

5 6000 20 185

6 6400 11 160

7 6100 8 177

8 6400 11 315
9 6900 29 170
10 7300 31 240
11 6950 6 184

12 7350 10 218
13 6920 14 216
14 8450 8 246
15 9600 18 229
16 10900 7 269
17 10200 9 244
18 12200 10 305
19 10500 6 303
20 12800 8 320
21 12600 12 322
22 11500 14 460
23 13800 11 430
24 14000 9 422
olicy to increase sales of a newly launched product. The company has invested in advertisements as well as
employed salesmen, and advertisement expenditure for 24 randomly selected months. Develop a predict m
edict sales of a company when 35 salesmens and advertisement expenditure is 500 thousands. Write y

Solution: Using the "Data Analysis" in the MS excel

Step to be followed
Formulate the Equation
Let the Equation for predictive model be Sales = a*(Sal
Step-1
or in other words, Y = a
where a = coefficient for Salesmen , b = coefficient for Adv
Calculate the Correlation factor for variables
Step-2 For Salesman, Correlation is
For Advertisement, Correlation is

Apply multiple Regression using Data anal

SUMMARY OUTPUT

Regression Statistics
Multiple R 0.859688849
R Square 0.739064916
Adjusted R Square 0.714213956
Standard Error 1560.546515
Observations 24

ANOVA
df
Step-3 Regression 2
Residual 21
Total 23
 Coefficients
Intercept 3856.692673
Salesmen
(X1) -104.32061
Advertisemnet (in
thousands
rupees)
(X2) 24.60928178

State the Predictive Model

the Equation for predictive model will be Sales = -104.321
Step-4
or in other words, Y = -104.321

Predict sales of a company when 35 salesmens

the Equation for predictive model will be Sales = -104.321

Step-5

thus the sales will be Rs. 1,25,1

Business Strategy

as is clear from te pedictive model, the number of salesmen w

the Sales. Exactly speaking, one unit increase in salesmen w
Step-6 in advertisement will increase the sales figure by 24,000 rupe

So as a company, I should decrease the number of salesmen

 company has invested in advertisements as well as employed salesmen for inceasing
24 randomly selected months. Develop a predict model to know the impact of
ertisement expenditure is 500 thousands. Write your business Strategy.

is" in the MS excel

quation
predictive model be Sales = a*(Salesmen) + b*(Advertisement)

, Y = a*(X1) + b*(X2)
t for Salesmen , b = coefficient for Advertisement , c= constant
orrelation factor for variables
is -0.3881418
ation is 0.8086179
e Regression using Data analysis

SS MS F
144851448.557287 72425724.2786434 29.73989361
51141413.9427132 2435305.42584349
195992862.5
 Standard Error t Stat P-value
1340.7721043442 2.8764714458 0.009032934

39.489379783 -2.641738385 0.015252106

3.923141041 6.2728516576 3.2006E-006

ctive Model
dictive model will be Sales = -104.321*(Salesmen) + 24.6093*(Advertisemen

Y = -104.321*(X1) + 24.6093*(X2)

a company when 35 salesmens and advertisement expenditure is

dictive model will be Sales = -104.321*(35) + 24.6093*(500) + 3856.69

Sales = 12510.11 in thousand rupees

ales will be Rs. 1,25,10,110

edictive model, the number of salesmen will reduce the sales figures but the increase
peaking, one unit increase in salesmen will decrease the sales figure by 104000 rupee
l increase the sales figure by 24,000 rupees.

hould decrease the number of salesmen to increase the sales figures and focus on in
Advertisement) + c

+ b*(X2) + c
= constant

Moderately Negative Relationship with Sales

Strongly Positive Relationship with Sales

Significance F
7.5E-007
 Lower 95%Upper 95%Lower 95.0% Upper 95.0%
1068.404 6644.981 1068.40445 6644.9808939891

-186.443 -22.1979 -186.44327 -22.1979497589

16.45066 32.7679 16.4506634 32.7679001755

6093*(Advertisement) + 3856.693 in thousand rupees

24.6093*(X2) + 3856.693 in thousand rupees

nt expenditure is 500 thousands.

3*(500) + 3856.693 in thousand rupees

thousand rupees

gures but the increase in expenditure on advertisements will increase

figure by 104000 rupees, whereas the one thousand rupees increase

figures and focus on increasing the advertisement costs.

Solution: Using the "Data Analysis" in the MS excel, the output
Step to be followed
Formulate
Let theforEquation
the Equation predictive model be Sales = a*(
Step-1
where a = coefficient for Salesmen , b = coefficient fo
Calculate the Correlation factor for variables
Step-2 For Salesman, Correlation is
For Advertisement, Correlation is

Step-3 Perform the test on SPSS

Data File Snapshot
 Constant c
Coefficient b
Coefficient a

State the Predictive Model

Step-4 the Equation for predictive model will be Sales = -104
or in other words, Y = -104
Predict sales of a company when 35 salesme
the Equation for predictive model will be Sales = -104
Step-5 Sales = 12510.11
thus the sales will be Rs. 1,25
Business Strategy

Step-6
 as is clear from te pedictive model, the number of salesm
the Sales. Exactly speaking, one unit increase in salesm
Step-6 in advertisement will increase the sales figure by 24,000

So as a company, I should decrease the number of salesm

cel, the output table thus obtained is as shown below :

e Sales = a*(Salesmen) + b*(Advertisement) + c

b = coefficient for Advertisement , c= intercept on Y-axis

r for variables
-0.5001 Moderately Negative Relationship with Sales
0.8077 Strongly Positive Relationship with Sales

Output File Snapshot

b
a

e Sales = -104.321*(Salesmen) + 24.609*(Advertisement) + 3856.693

Y = -104.321*(X1) + 24.609*(X2) + 3856.693
en 35 salesmens and advertisement expenditure is 500 thousands.
e Sales = -104.321*(35) + 24.609*(500) + 3856.693 in thousand ru
in thousand rupees

e Rs. 1,25,10,110
 number of salesmen will reduce the sales figures but the increase in expenditure on adv
ncrease in salesmen will decrease the sales figure by 104000 rupees, whereas the one t
figure by 24,000 rupees.

number of salesmen to increase the sales figures and focus on increasing the advertise
+ c
nt) + 3856.693 in thousand rupees
+ 3856.693 in thousand rupees
is 500 thousands.
93 in thousand rupees
se in expenditure on advertisements will increase
ees, whereas the one thousand rupees increase

ncreasing the advertisement costs.