# Case study

User Generated

lnfnpvuna24

Mathematics

## Description

Wal-Mart is the second largest retailer in the world. The data file (WalMart_revenue.xlsx) is included in the Excel data zip file in week one, and it holds monthly data on Wal-Mart’s revenue, along with several possibly related economic variables.

• Develop a linear regression model to predict Wal-Mart revenue, using CPI as the only independent variable.
• Develop a linear regression model to predict Wal-Mart revenue, using Personal Consumption as the only independent variable.
• Develop a linear regression model to predict Wal-Mart revenue, using Retail Sales Index as the only independent variable.
• Which of these three models is the best? Use R-square value, Significance F values and other appropriate criteria to explain your answer

Identify and remove the four cases corresponding to December revenue.

• Develop a linear regression model to predict Wal-Mart revenue, using CPI as the only independent variable.
• Develop a linear regression model to predict Wal-Mart revenue, using Personal Consumption as the only independent variable.
• Develop a linear regression model to predict Wal-Mart revenue, using Retail Sales Index as the only independent variable.
• Which of these three models is the best? Use R-square values and Significance F values to explain your answer.
• Comparing the results of parts (d) and (h), which of these two models is better? Use R-square values, Significance F values and other appropriate criteria to explain your answer.

Please use one Excel file to complete this problem, and use one sheet for one sub-problem. Use a Microsoft Word document to answer questions.

### Unformatted Attachment Preview

Date 11/28/2003 12/30/2003 1/30/2004 2/27/2004 3/31/2004 4/29/2004 5/28/2004 6/30/2004 7/27/2004 8/27/2004 9/30/2004 10/29/2004 11/29/2004 12/31/2004 1/21/2005 2/24/2005 3/30/2005 4/29/2005 5/25/2005 6/28/2005 7/28/2005 8/26/2005 9/30/2005 10/31/2005 11/28/2005 12/30/2005 1/27/2006 2/23/2006 3/31/2006 4/28/2006 5/25/2006 6/30/2006 7/28/2006 8/29/2006 9/28/2006 10/20/2006 11/24/2006 12/29/2006 1/26/2007 Wal Mart Revenue 14,764 23,106 12,131 13,628 16,722 13,98 14,388 18,111 13,764 14,296 17,169 13,915 15,739 26,177 13,17 15,139 18,683 14,829 15,697 20,23 15,26 15,709 18,618 15,397 17,384 27,92 14,555 18,684 16,639 20,17 16,901 21,47 16,542 16,98 20,091 16,583 18,761 28,795 20,473 CPI 552,7 552,1 554,9 557,9 561,5 563,2 566,4 568,2 567,5 567,6 568,7 571,9 572,2 570,1 571,2 574,5 579 582,9 582,4 582,6 585,2 588,2 595,4 596,7 592 589,4 593,9 595,2 598,6 603,5 606,5 607,8 609,6 610,9 607,9 604,6 603,6 604,5 606,348 Personal Consumption 7868495 7885264 7977730 8005878 8070480 8086579 8196516 8161271 8235349 8246121 8313670 8371605 8410820 8462026 8469443 8520687 8568959 8654352 8644646 8724753 8833907 8825450 8882536 8911627 8916377 8955472 9034368 9079246 9123848 9175181 9238576 9270505 9338876 9352650 9348494 9376027 9410758 9478531 9540335 Retail Sales Index December 301337 0 357704 1 281463 0 282445 0 319107 0 315278 0 328499 0 321151 0 328025 0 326280 0 313444 0 319639 0 324067 0 386918 1 293027 0 294892 0 338969 0 335626 0 345400 0 351068 0 351887 0 355897 0 333652 0 336662 0 344441 0 406510 1 322222 0 318184 0 366989 0 357334 0 380085 0 373279 0 368611 0 382600 0 352686 0 354740 0 363468 0 424946 1 332797 0
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Date
11/28/2003
12/30/2003
1/30/2004
2/27/2004
3/31/2004
4/29/2004
5/28/2004
6/30/2004
7/27/2004
8/27/2004
9/30/2004
10/29/2004
11/29/2004
12/31/2004
1/21/2005
2/24/2005
3/30/2005
4/29/2005
5/25/2005
6/28/2005
7/28/2005
8/26/2005
9/30/2005
10/31/2005
11/28/2005
12/30/2005
1/27/2006
2/23/2006
3/31/2006
4/28/2006
5/25/2006
6/30/2006
7/28/2006
8/29/2006
9/28/2006
10/20/2006
11/24/2006
12/29/2006
1/26/2007

Wal Mart Revenue
14.764
23.106
12.131
13.628
16.722
13.98
14.388
18.111
13.764
14.296
17.169
13.915
15.739
26.177
13.17
15.139
18.683
14.829
15.697
20.23
15.26
15.709
18.618
15.397
17.384
27.92
14.555
18.684
16.639
20.17
16.901
21.47
16.542
16.98
20.091
16.583
18.761
28.795
20.473

CPI
552.7
552.1
554.9
557.9
561.5
563.2
566.4
568.2
567.5
567.6
568.7
571.9
572.2
570.1
571.2
574.5
579
582.9
582.4
582.6
585.2
588.2
595.4
596.7
592
589.4
593.9
595.2
598.6
603.5
606.5
607.8
609.6
610.9
607.9
604.6
603.6
604.5
606.348

Personal Consumption
7868495
7885264
7977730
8005878
8070480
8086579
8196516
8161271
8235349
8246121
8313670
8371605
8410820
8462026
8469443
8520687
8568959
8654352
8644646
8724753
8833907
8825450
8882536
8911627
8916377
8955472
9034368
9079246
9123848
9175181
9238576
9270505
9338876
9352650
9348494
9376027
9410758
9478531
9540335

Retail Sales Index December
301337
0
357704
1
281463
0
282445
0
319107
0
315278
0
328499
0
321151
0
328025
0
326280
0
313444
0
319639
0
324067
0
386918
1
293027
0
294892
0
338969
0
335626
0
345400
0
351068
0
351887
0
355897
0
333652
0
336662
0
344441
0
406510
1
322222
0
318184
0
366989
0
357334
0
380085
0
373279
0
368611
0
382600
0
352686
0
354740
0
363468
0
424946
1
332797
0
281463
424946

Date
11/28/2003
1/30/2004
2/27/2004
3/31/2004
4/29/2004
5/28/2004
6/30/2004
7/27/2004
8/27/2004
9/30/2004
10/29/2004
11/29/2004
1/21/2005
2/24/2005
3/30/2005
4/29/2005
5/25/2005
6/28/2005
7/28/2005
8/26/2005
9/30/2005
10/31/2005
11/28/2005
1/27/2006
2/23/2006
3/31/2006
4/28/2006
5/25/2006
6/30/2006
7/28/2006
8/29/2006
9/28/2006
10/20/2006
11/24/2006
1/26/2007

Wal Mart Revenue
14.764
12.131
13.628
16.722
13.98
14.388
18.111
13.764
14.296
17.169
13.915
15.739
13.17
15.139
18.683
14.829
15.697
20.23
15.26
15.709
18.618
15.397
17.384
14.555
18.684
16.639
20.17
16.901
21.47
16.542
16.98
20.091
16.583
18.761
20.473

CPI
552.7
554.9
557.9
561.5
563.2
566.4
568.2
567.5
567.6
568.7
571.9
572.2
571.2
574.5
579
582.9
582.4
582.6
585.2
588.2
595.4
596.7
592
593.9
595.2
598.6
603.5
606.5
607.8
609.6
610.9
607.9
604.6
603.6
606.348

Personal Consumption
7868495
7977730
8005878
8070480
8086579
8196516
8161271
8235349
8246121
8313670
8371605
8410820
8469443
8520687
8568959
8654352
8644646
8724753
8833907
8825450
8882536
8911627
8916377
9034368
9079246
9123848
9175181
9238576
9270505
9338876
9352650
9348494
9376027
9410758
9540335

Retail Sales Index December
301337
0
281463
0
282445
0
319107
0
315278
0
328499
0
321151
0
328025
0
326280
0
313444
0
319639
0
324067
0
293027
0
294892
0
338969
0
335626
0
345400
0
351068
0
351887
0
355897
0
333652
0
336662
0
344441
0
322222
0
318184
0
366989
0
357334
0
380085
0
373279
0
368611
0
382600
0
352686
0
354740
0
363468
0
332797
0

SUMMARY OUTPUT
Regression Statistics
Multiple R
0.33715206
R Square
0.11367151
0.08971669
Standard Error
3.68940061
Observations
39
ANOVA
df
Regression
Residual
Total

Intercept
CPI

1
37
38
Coefficients
-24.4085438
0.07179155

SS
64.59074523
503.6320451
568.2227904

MS
64.5907452
13.6116769

F
4.74524526

Significance F
0.035825565

Standard Error
t Stat
19.24848215 -1.26807629
0.032956721 2.17835839

P-value
0.21269225
0.03582556

Lower 95%
-63.40967322
0.00501489

Wal Mart Revenue vs CPI (Scatterplot)
35

Wal Mart Revenue

30
y = 0.0718x - 24.409
R² = 0.1137

25
20
15
10
5
0
540

550

560

570

580

CPI

Upper 95%
14.5925857
0.13856821

590

600

610

610

620

SUMMARY OUTPUT
Regression Statistics
Multiple R
0.39402403
R Square
0.15525494
0.13242399
Standard Error
3.6018141
Observations
39
ANOVA
df
Regression
Residual
Total

Intercept
Personal Consumption

SS
88.21939269
480.0033977
568.2227904

MS
F
88.2193927 6.80019672
12.9730648

Significance F
0.013066699

Coefficients Standard Error
-8.8950748
10.13900841
3.0282E-06
1.16123E-06

t Stat
P-value
-0.8773121 0.38597828
2.60771868
0.0130667

Lower 95%
-29.43865722
6.75287E-07

1
37
38

Wal Mart Revenue vs Personal Consumption
(Scatterplot)
Wal Mart Revenue

35
30

y = 3E-06x - 8.8951
R² = 0.1553

25
20
15
10
5
0
7000000

7500000

8000000

8500000

9000000

Personal Consumption

Upper 95%
11.6485076
5.381E-06

9500000

sumption

9500000

10000000

SUMMARY OUTPUT
Regression Statistics
Multiple R
0.7574074
R Square
0.57366597
0.56214343
Standard Error
2.55878303
Observations
39
ANOVA
df
Regression
Residual
Total

Intercept
Retail Sales Index

1
37
38
Coefficients
-13.8039676
9.1859E-05

SS
MS
F
Significance F
325.970078 325.970078 49.7864101
2.38791E-08
242.2527123
6.5473706
568.2227904
Standard Error
t Stat
4.455669125 -3.09806837
1.30186E-05 7.05594856

P-value
0.00370835
2.3879E-08

Lower 95%
-22.83201079
6.54805E-05

Wal Mart Revenue vs Retail Sales Index
(Scatterplot)
Wal Mart Revenue

35
30

y = 9E-05x - 13.804
R² = 0.5737

25
20
15
10
5
0
250000 270000 290000 310000 330000 350000 370000 390000 410000 430000

Retail Sales Index

Upper 95%
-4.77592439
0.00011824

430000 45000...

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