ASSIGNMENT NO: 3

Submitted To: Dr. RAMPRRASADH GOARTHY

PGDM 2019-2021

Name SAP ID
Saurabh Pratap Singh 80203190169
Aditya Yadav 80203190184
Yogeshkumar Shankariya 80203190158
Linear Regression for Marketing:
Here we can take
Y (Dependent Variable) = Sales
X (Independent Variable) = Price of the product, Number of Sales Employees, Expense on
product promotion at ground level, Involvement of digital platform for
promotion, Quality of the product, Packaging, Distribution and
Quantity.

 Price of product is directly relating to the sales of the product. If the price of the product
is low then sales become very high.
 If the number of sales employees are high then they can promote product to the large
customer segments, which ultimately lead to higher sales of the product.
 If the company spend more on the promoting product at the ground level then it will
generate more customer leads.
 Now, most people are engaging themselves on social media, so if the company is
promoting their product on social media then they can target large customer which lead to
higher sales.
 If the quality of the product is decent compare to price then it will generate positive
customer feedback which because of word of mouth it will generate positive image of the
company which ultimately generate more sales.
 If the packaging looks attractive then customer trial rate (initial purchase rate) will
increase which generate more sales.
 If the company’s distribution system is good enough then company generate positive
image among the retailers, which give competitive advantage to the company against
their competitors. Because retailers prefer the company who supply goods within times.
So, because of these retailers sell the company’s product, it will generate more sales.
 Quantity is not most but also not least affecting the perception of the product to the
customer, if the quantity is high enough then it will also responsible to increase the sale
of the products.
Here there are more than one independent variable so we can do multiple linear regression.
Linear Regression for Human Resource:

Linear regression is used for HR forecasting. Forecasting is the process of predicting future event
based on historical data. HR forecasting is the process of predicting about the human resource
requirement for a future event.
Y (Dependent Variable) = Manpower requirements
X (Independent Variable) = Production output, Employment trends, Replacement needs,
Absenteeism, Expansion and growth

 Production Output: As the production output is to increase by a company, a company

needs to increase his manpower requirement.
 Employment Trends: Employment trends in a country affects the manpower requirement
to a great extent.
 Replacement needs: Organization has to find out the replacement needs due to retirement,
death, resignation, termination etc. This affects the overall manpower requirements.
 Absenteeism: Absenteeism is a major concern in manpower planning. Organization need
to take account factor of absenteeism in order to do manpower planning forecasting.
 Expansion and growth: Expansion and growth policy of organization has direct impact on
manpower planning. Expansion of organization leads a greater demand of manpower
which in turn needs to be incorporated in manpower planning forecast

Business Relationship:
It may help in preventing overstaffing, understaffing. It will reduce HR cost; it helps to make
macro business decision. This valuable forecasting enables us to plan and execute recruitment,
selection, training and development program in planned and proactive fashion to ensure the
trained marketing staff are on hand exactly when required the organization.
Linear Regression for Operations:
Linear regression can be used to demand analysis. Demand analysis, for instance, predicts the
number of items which a consumer will probably purchase. However, demand is not the only
dependent variable when it comes to business
Y (Dependent Variable) = Demand
X (Independent Variable) = Price, Income of Consumers, Price of substitutes, Price of
complements, etc.

 Price: Some goods are more affected by price than others. If petrol increases in price,
because it is a necessity, there is only a small fall in demand. If Volvic water increases in
price, there will be a significant fall in demand because people buy cheaper substitutes 
 Income: An increase in disposable income enabling consumers to be able to afford more
goods. Higher income could occur for a variety of reasons, such as higher wages and
lower taxes
 Substitutes: An increase in the price of substitutes, e.g. if the price of Samsung mobile
phones increases, this will increase the demand for Apple iPhones – a major substitute for
the Samsung.
 Complements. A fall in the price of complements will increase demand. E.g. a lower
price of Play Station 2 will increase the demand for compatible Play Station games.

Business Relationship:
Proper demand forecasting gives businesses valuable information about their potential in their
current market and other markets, so that managers can make informed decision about pricing,
business growth strategies and market potential.
Without demand forecasting, businesses risk making poor decisions about their products and
target markets and ill-informed decisions can have far reaching negatives effects on inventory
holding costs, customer satisfaction, supply chain management and profitability

Linear Regression for Finance:

Linear Regression in Finance has several applications. One of the most important statistical
models in Finance is Capital Asset Pricing Model (CAPM). This equation is a model that
determines the relationship between the expected return of an asset and the market risk premium.
This Regression analysis helps in calculating the Beta which explains the volatility of returns
relative to overall market.

Y (Dependent Variable) = Expected Return of the Stock

X (Independent Variable) = Expected Return of Market, Expected Return of Benchmark.

 Expected Return of Market: It is clearly observed in this model that fluctuations in

market return plays a key role in determining the expected return of stocks in share
market. There is a high correlation between the two which explains a lot of variations in
the expected return of stock.

 Expected Return of Benchmark: It has been clearly observed by finance practitioners that
proper and accurate choice of benchmark plays a vital role in explaining the return
expectations in the stock.

Business Relationship:
It has been observed that this CAPM Model plays a key role in explaining more than 90% in the
variations in the expected return of the stock. So, this model has a huge business importance
especially in the domain of finance in calculating the fluctuations in the stock return. This model
is one of the oldest asset pricing models which is still widely used because it captures a lot of
variations in the expected return of the stock.