Please include excel attachment 6. Now omit both price and temperature from the
ID: 3262679 • Letter: P
Question
Please include excel attachment
6. Now omit both price and temperature from the regression equation then run the
simple linear regression again. Given the Excel output of only one independent
variable, income, should a marketing plan for soft drinks be designed that relocates
most canned drink vending machines into low-income neighborhoods? Please
TABLE 1. SOFT DRINK DEMAND DATA 6-Pack Price (3)Income/Capita (51,000 Cans/CapitaYr 200 Alabama 11.7 15.3 2.19 Arkansas alidornia Colorade 237 1.93 2.59 17.1 24.3 25.2 16.2 12.6 14.4 21.6 ecticut 2.49 1.99 Delaware 217 1.89 2.39 2.35 2.19 2.21 2.17 2.05 295 Kentucky 230 269 11.7 ouisiana Maine 2.19 217 114 108 108 248 14.4 18.9 19.8 18.9 16.2 Massachusetts ichigan Minnesota 2.25 2.31 1.98 1.94 2.31 2.28 2.19 Nebraska 14.4 21.6 16.2 21.6 13.5 166 48 New Hampshire New Jersey New Mexico New York North Carolina 143 2.31 2.17 157 330 165 48 1.89 11.7 12.6 19.8 Dakota 2.21 2.19 17.1 Rhode Island 138 Carolina 10.8 11.7 South Dakota 15.3 Utah Vermont 144 nia 270 Washington 2.19 13.5 Wisconsin 2.38 ominExplanation / Answer
Solution:
The regression equation is
Cans/capita/yr = 254,56 – 5.968*(income/capita in ‘000)
Yes, the marketing plan should not be devised to relocate canned drink vending machines to low income neighbourhoods, because we see that with decrease in income the demand for cans/capita/year rises. In low income neighbourhood, the income will be less, so the demand for Cans would be greater as per the regression output. However, the r-squared value is only 0.11 for this model, which means that only 11% of variability in demand is explained by this model. So, other variables need to be considered before making the decision.