Multiple Regression Project

Locating New Pam and Susan’s Stores

Introduction

Pam and Susan’s department stores are in the process of opening a new business unit. There are two locations that are being considered for the new store and decision is based upon estimates of sales for both of them. My job is to use data gathered from each store as well census data in store’s trading zones to predict sales at both of the sites that are being consider for their newest store.

Data
We have data out of 250 stores. The data include demographics, economics, sales of the stores, compositions of those sales as well as sales behavior per households. There are 31 variables being consider for each store and those variables range from sales, …show more content…

Question 2
The planning department created a competitive type classification for potential sites that range from 1 to 7. Only three comptypes were considered for the regression models as per instructed for the project along with sales and the 10 variables with the highest correlation with sales. comtype1 | 9,393.82229 | comtype2 | 3,802.26442 | comtype7 | -3,123.24462 |

All comptypes are highly significant according to the t-test of significance of regression coefficient. Expected sales decrease as the value of the competitive type increase.

Question 3 | Coefficient | A | B | PREDICT A | PREDICT B | Intercept | 16,020.78118 | 1 | 1 | 16020.78118 | 16020.78118 | %spanishsp | 149.15175 | 10.8 | 6.6 | 1610.8389 | 984.40155 | %dryers | -44.16538 | 9 | 12.2 | -397.48842 | -538.817636 | %freezer | -112.48017 | 6.1 | 5 | -686.129037 | -562.40085 | %sch0-8 | -79.84655 | 37.4 | 40.1 | -2986.26097 | -3201.846655 | comtype1 | 9,393.82229 | 1 | 0 | 9393.82229 | 0 | comtype2 | 3,802.26442 | 0 | 0 | 0 | 0 | comtype7 | -3,123.24462 | 0 | 0 | 0 | 0 | | | | | $22,955.56 | $12,702.12 | | | | | | | | | | | | | | | | | | | | | | | $10,253.45 | DIFFERENCE | | | | | | |
Site A has the higher sales forecast with $ 10,253.45 more sales than site B so my recommendation is to locate the new store on SITE A.

Question 4
The correlation