Premium Essay

Big Suzy Snack Cake

In:

Submitted By mcraig21
Words 1333
Pages 6
To: The Regional Food Marketer Date: November 4, 2012
Ye Olde FoodKing Company

From:

Re: Big Suzy’s Snack Cakes Regression Analysis

Introduction

The Regional Food Manager for Ye Olde FoodKing Company has retained Mark Craig of Blue Steel Consulting to perform a regression analysis to forecast demand of your product. The four characteristics readily available included price, competitors’ price, average income, and market population. The results of each regression analysis are presented at the end of this memo. The remainder of this memo describes the regression analysis used and limitations to the data available. Running a regression provides a statistical procedure to estimate the liner dependency of one or more independent variables on dependent variables. Confidence that the true (population) relation between X and Y lies between “Lower” and “Upper”

Methodology * Form a theoretical model of the relationship under consideration. * This model suggests what explanatory variables to include in the analysis. * Collect data on independent and dependent variables. * Estimate regression line. * Examine results. This includes test of statistical significance and analysis of residuals.

Regression Analysis

Regression analysis is a statistical technique that examines the relation of a dependent variable to specified independent variables. The easiest form of regression analysis involves finding and understanding the straight-line relationship to illustrate the variation in the dependent variable, (Y), relies on the variation in the independent variable, (X). For this analysis, the (X) values consist of price, competitors’ price, average income, and market population. The (Y) value represented by the number of pies sold. The regression equation can be stated as:

Y = a + bX

The result of a regression analysis is a

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