- 20 Marks
QT – Nov 2017 – L1 – Q3 – Forecasting
Analyze the relationship between website hits and promotions using correlation and regression analysis.
Question
A small business is interested in the relationship between the number of hits on its website (measured by the number of visitors that have used the main menu) and the level of website promotion (in GH¢ 00s). The table below gives the figures for the last six months:
| Month | Web Site Hits | Web Site Promotion (GH¢ 00s) |
|---|---|---|
| 1 | 25 | 1.0 |
| 2 | 24 | 1.2 |
| 3 | 56 | 1.6 |
| 4 | 54 | 1.4 |
| 5 | 55 | 1.2 |
| 6 | 58 | 1.8 |
Required:
a) Graph the number of website hits against website promotion. (2 marks)
b) Comment on any possible relationship in (a) above. (2 marks)
c) Calculate the correlation coefficient and give an interpretation to its value. (5 marks)
d) Determine the regression line. (5 marks)
e) Using the regression line found in part (d) above, predict the number of website hits if the level of monthly promotion were increased to GH¢200. (2 marks)
f) Comment on the reliability of your prediction in (e) above. (1 mark)
g) Comment on the simple forecasting model you have developed above. (3 marks)
Find Related Questions by Tags, levels, etc.
- Tags: Correlation Coefficient, Forecasting, Regression Line
- Level: Level 1
- Topic: Forecasting
- Series: NOV 2017