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Tips for Pam and Sue Essay

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Multiple Regression Project The is the only deliverable in Week Four. It is the case study titled “Locating New Pam and Susan’s Stores,” described at the end of Chapter 12 of your textbook. The case involves the decision to locate a new store at one of two candidate sites. The decision will be based on estimates of sales potential, and for this purpose, you will need to develop a multiple regression model to predict sales. Specific case questions are given in the textbook, and the necessary data is in the file named pamsue.xls. Assuming that you are reasonably comfortable with using Excel and its Analysis ToolPak add-in, you should expect to spend approximately 2-3 hours on computer work, and another 3-4 hours on writing the …show more content…

If the old sales column remains but appears empty, delete that column. 2. Obtain a scatterplot of the sales on the vertical axis against comtype on the horizontal axis. This will give you a good idea of whether different categories of comtype appear to differ in sales. In the scatterplot, you should see that sales in the middle categories 3 - 6 are in similar ranges on the vertical axis, but 1 and 2 have somewhat higher sales, and category 7 appears to have somewhat lower sales. This implies that, when you create dummy variables for comtype, dummy variables for categories 1, 2, 7 are likely to be statistically significant in the multiple regression model (and dummy variables for categories 3 - 6 are likely to be not significant). Although it would be desirable to also obtain the scatterplot of sales against every other X variable, you can omit these if you do not have time, and use the correlation coefficients instead (see step 4 below). 3. Insert seven new columns immediately to the left of comtype, and in these columns, create seven dummy variables to represent the seven categories of site types. Name them comtype1, comtype2, ..., comtype7. At this point, you have 40 columns of data in the spreadsheet with comtype and sales in the last two columns. 4. Use the Correlation facility under Data Analysis to obtain the correlation coefficients between sales and all of the other variables except store and comtype (why exclude

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