Answer: See explanation
Step-by-step explanation:
a. Predict the sales resulting from a $15,000 investment in inventory and an advertising budget of $10,000.
To solve this, in the regression equation, we have to replace x1 with 15 and then replace x2 with 10. This will be:
y = 25 + 10x1 + 8x2.
y = 25 + 10(15) + 8(10)
y = 25 + 150 + 80
y = 255
Therefore, the predicted sales is 255.
b. Interpret b1 and b2 in this estimated regression equation.
A change in b1 which is the inventory investment will bring about a change of 10 units in the sales as long as other values are constant.
A change in b2 which is the Advertising expenditure will bring about a change of 8 units in the sales as long as other values are constant.
