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# Ziba, Inc. has provided the following information regarding one of their products for the years 1986 through 2010 Answer

“Problem 2. Ziba, Inc. has provided the following information regarding one of their products for the years 1986 through 2010.

1. Sales in \$1,000,000 (Y)

3. Price in \$100 (X2)

4. Competitor’s Price in \$100 (X3)

5. Time (X4),

where 1986 = 1. The data file “Regression and Correlation Data-V10” is located in Assessment 6 folder. Refer to that data file and perform the following analyses and fully explain your results.

a. Run a correlation analysis and explain your results. Be sure to discuss the concept of multicollinearity.

b. Run a regression analysis relating sales (Y) and all of the independent variables [Advertising (X1) through Time (X4).] Is the regression model significant? Explain how you arrived at your answer.

c. Which variables are significant and which are not? Explain how you arrived at your answer.

d. Drop the variable(s) that at 95% confidence were not significant in part “b” and run a new regression analysis. Write your estimated regression equation.

e. What is the value of R-square you found in part “d”?

Fully explain the meaning of the R-square that you found.

f. Use the model of part “d” and forecast sales for 2011 through 2013, assuming the company is planning to increase the price by 4% annually in years 2011 through 2013.