Pam And Susan's Store

2171 Words9 Pages
Multiple Regression Project July 6, 2012 Introduction This project is intended to help make the best decision while choosing a location for a new Pam and Susan’s store. The main goal is to help identify the most profitable location out of two proposed store sites – Site A and Site B. We will be creating a multiple regression equation to forecast/predict potential sales (Y) at both Site A and Site B while using both quantitative census information and company provided store metrics as well as qualitative competitive type data as predictor variables X. As a result, we will recommend to Pam and Susan's stores which site they should choose for a new store, i.e., which site is expected…show more content…
Forecasted sales $ (Y) = 13,483.46*1000 + 121.70*1000* %spanishsp – 38.68*1000*%dryers – 81.05*1000*%freezer + 8,980.09*1000*comptype1+ 3,984.43*1000*comtype2 – 3,147.38*1000*comtype7 Figure 6 Excerpt from Summary Output Interpretation of the final multiple regression equation to answer Question 1 Pam and Sue’s Case. The equation tells us that for stores in the area with same % of Spanish people, same % of households with dryers and freezers, competitive type 1 (comtype1) stores will add on average $8,980,090 of sales dollars and comtype2 stores will add on average $3,984,430 sales dollars more than other competitive type stores. For example, everything else unchanged, comtype 7 store would actually lower sales by $3,147.380 compared with other comtype…show more content…
A key advantage of a multiple regression, different from a simple regression, is the ability to use multiple types of variables which are both quantitative and qualitative variables. Another advantage of a multiple regression equation is that it uses data very efficiently and good results can be obtained with relatively small data sets. As the theory of linear regression is widely known and easy to understand, we can create deferent types of easy to interpret statistical intervals to forecast, for example,

More about Pam And Susan's Store

Open Document