Coefficients Standard Error Intercept 10211 228752 Price 015

Coefficients

Standard Error

Intercept

   1.0211

22.8752

Price

-0.1524

0.1411

Adver

   0.8849

0.2886

Lines

-0.1463

1.5340

A microcomputer manufacturer has developed a regression model relating his sales (y in $10,000s) with three independent variables. The three independent variables are price per unit (Price in $100s), advertising (Adver in $1,000s) and the number of product lines (Lines). Part of the regression results is shown below.

If the manufacturer has 10 product lines, advertising of $40,000, and the price per unit is $3,000, what is your estimate of their sales? Give your answer in dollars.

Solution

Y = 1.0211 - 0.1524(Price) + 0.8849(Adver) - 0.1463(Lines)

So, for lines = 10, adver = $40,000 and price = $3000.

Y = 1.0211 - 0.1524(30) + 0.8849(40) - 0.1463(10)

So, Y = 1.0211 - 4.572 + 35.396 - 1.463

So, Y = 30.3821

So, Estimeated sales = $303821.