Vanguard Corporation

The director of marketing at Vanguard Corporation believes that sales of the company's Bright Side laundry detergent (S) are related to Vanguard's own advertising expenditure (A), as well as the combined advertising expenditures of its three biggest rival detergents (R). The marketing director collects 36 weekly observations on S, A, and R to estimate the following multiple regression equation: S = a + bA + cR where S, A, and R are measured in dollars per week. Vanguard's marketing director is comfortable using parameter estimates that are statistically significant at the 10 percent level or better. a. What sign does the marketing director expect a, b, and c to have? b. Interpret the coefficients a, b, and c. The regression output from the computer is as follows: c. DoesVanguard'sadvertisingexpenditurehaveastatisticallysignificanteffectonthe sales of Bright Side detergent? Explain, using the appropriate p-value. d. Does advertising by its three largest rivals affect sales of Bright Side detergent in a statistically significant way? Explain, using the appropriate p-value. Yes, the advertising by its three largest rivals affect sales of Bright Side detergent in a statistically significant way because the P-value of this coefficient is 0.0927 which is less than the level of significance that is 10% or 0.10. So it means this variable is helpful in predicting the sales of the company's Bright Side laundry detergent (S). So we can conclude that the combined advertising expenditures of its three biggest rival detergents is significant in this multiple regression model. e. What fraction of the total variation in sales of Bright Side remains unexplained? What can the marketing director do to increase the explanatory power of the sales equation? What other explanatory variables might be added to this equation? Here R-square value is 0.2247; it means that the total variation in sales of Bright Side remains unexplained is 1-0.2247 = 0.7753. To increase the explanatory power of...