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SIMULATION
A data scientist needs to determine whether product sales are impacted by other contributing factors. The client has provided the data scientist with sales and other variables in the data set.
The data scientist decides to test potential models that include other information.
INSTRUCTIONS
Part 1
Use the information provided in the table to select the appropriate regression model.
Part 2
Review the summary output and variable table to determine which variable is statistically significant.
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Part 1
Linear regression.
Of the four models, linear regression has the highest R (0.8), indicating it explains the greatest proportion of variance in sales.
Part 2
Var 4 -- Net operations cost.
Net operations cost has a p-value of essentially 0 (far below 0.05), indicating it is the only additional predictor statistically significant in explaining sales. Neither inventory cost (p0.90) nor initial investment (p0.23) reach significance.
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