kramer smith casekramer smith owns a dry-cleaning


Kramer Smith Case

Kramer Smith owns a dry-cleaning service and is thinking about changing his advertising expenditures for the year. He hires you as a consultant to determine the relationship between sales, consumer incomes, and advertising by means of multiple regression analysis.

Smith has gathered the sales, income, and advertising data for the last year, as shown in Table 1.

The Sales and Advertising Data (2009)

 Table 1

Month

Advertising ($)

Sales

($)

Consumer Income ($)

January

10,000

43,000

41,000

February

9,000

40,500

43,000

March

11,000

41,000

45,000

April

12,000

45,900

47,000

May

11,000

47,000

49,000

June

12,000

51,000

51,000

July

13,000

54,000

53,000

August

13,000

57,000

55,000

September

14,000

56,000

57,000

October

15,000

60,000

58,000

November

15,800

61,000

59,000

December

16,700

63,000

61,000

Create a report answering the following questions:

  • Construct a scatter graph showing the advertising and sales relationship over the last twelve months.
  • Using multiple regression, conduct an analysis of the firm's sales revenue, consumer incomes, and advertising.
  • Describe how you would explain your results to Smith and what recommendations you would suggest.
  • Summarize your recommendations or advice to Smith concerning the relationship between sales, income, and advertising.

Create your report in a 2- to 3-page Microsoft Word document. ***Please use APA citation of work with references***

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Microeconomics: kramer smith casekramer smith owns a dry-cleaning
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