Activity I – A manager claims that increases in advertising expenditure will surely raise the firm’s profits, citing his sense that people find the firm’s ads entertaining.
- Sketch how you might refute this claim using:
- A theoretical argument
- Why might the refutation using data be more convincing?
Activity II – A grocery store manager is interested in the data-generating process for her store’s weekly soda sales. She believes factors impacting these sales include price, product placement, and whether the week contains a holiday. Write out a formal representation of the data-generation process for weekly soda sales that incorporates these and additional factors.
Activity III – Access the dataset Sales and Costs.xlsx (See the attached) and answer the following questions.
- Calculate these descriptive statistics.
- Mean of sales
- Variance of materials costs
- Covariance of labor costs and materials costs
- Mean of labor costs
- Total sales
- Calculate at least two more descriptive statistics for this dataset.