Pam and Sue

1715 Words7 Pages
Introduction The following case study will analyze Pam & Susan’s potential expansion of a new store into the Southwest market. The strategy for the expansion is to identify the most appropriate sites for new stores. Traditionally studies have been conducted by the company’s real estate experts where demographics, site visits, and competition were evaluated to come up with estimated sales for the new stores. Unfortunately, actual new store performance has fallen short of the estimates provided by the real estate department. The goal of this analysis is to use statistical methodology to predict sales at 2 potential locations at a much more accurate level and determine which location is likely to have higher sales. Data The data used in this analysis comes from census information in the stores’ trading zones as well as data on individual stores. Variables from the most recent census were compiled for the trading zone of each of the 250 stores. For each store there is data gathered on demographics and economics of the trading zones, as well as size, composition and sales of the store. There are a total of 28 quantitative demographic variables each measured as a percentage of the population within the trading zone, 2 quantitative store variables including sales and square feet, and 7 quantitative categorical variables for competitive type. Our sample size is 250 stores. Sales data is provided in $1,000s therefore a unit change in X will correspond to that X coefficient multiplied by $1,000. Results and Discussion In order to build a successful multiple regression model it is necessary to follow a multi step approach. Without taking this approach, we could run into issues in which we have an incorrect and imprecise forecast. The first step involves creating a scatterplot of sales against comtype. This will allow us to determine if different

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