Question

The following information about advertising expenditures and sales of a company is given below:

 

Advertising
expenditure (x)
Lakhs ( Image ignouassignments-ignouacademy-com--p-about-66440)

 

 

Sales (y)

Lakhs (Image ignouassignments-ignouacademy-com--p-information-12770)

Average 10 90
Variance 9 144
Correlation Coefficient between x and y is 0.8.

What should be the advertising budget if the company wants to attain sales target of Image ignouassignments-ignouacademy-com--p-advertising-42531 120 Lakhs?

12 Mar 2024
Answer :
Word Count : 310
To determine the advertising budget required to achieve a sales target of 120 Lakhs, we can use the concept of linear regression. The relationship between advertising expenditure (\(x\)) and sales (\(y\)) can be modeled as: \[ y = a + b x \] where: - \(a\) is the y-intercept, - \(b\) is the slope of the regression line. Given the data: - Average advertising expenditure (\(\bar{x}\)) = 10 Lakhs, - Average sales (\(\bar{y}\)) = 90 Lakhs, - _________ _______ ________ __________ _________ _____ ____ ___.
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