Mathematics in the Modern World

ENGADA, Von Regina Franchesca T.

BSN 1-5 Prof. Levi Bicua

MMW Exercise:
An Entrepreneur wanted to study on the relationship between the monthly e-commerce sales and
the online advertising costs. The following table represents the survey results for last year from
the 7 online stores.
Online Online Advertising cost (in $1000) Monthly E-commerce Sales (in $1000)
Store
1 1.7 368
2 1.5 340
3 2.8 665
4 5 954
5 1.3 331
6 2.2 556
7 1.3 376

A. Draw a scatter plot

Monthly E-commerce Sales for the data and
interpret the graph
Monthly E-commerce Sales Linear (Monthly E-commerce Sales)
1200

1000
f(x) = 171.47 x + 125.83
800 R² = 0.96
Axis Title

600

400

200

0
1 1.5 2 2.5 3 3.5 4 4.5 5 5.5

Form Linear
Direction Positive
Strength Strong
B. Compute the correlation coefficient and coefficient of determination and interpret.
r 0.980440158
r^2 0. 961263 or 96%

The r value implies that there is strong, positive linear relationship between the online
advertising cost and monthly e-commerce sales

C. At a = 0.05, determine whether the relationship is significant.

Research Question:
Is there a significant relationship between the online advertising cost and the monthly
e-commerce sales?
Hypothesis:
H0: p = 0 (There is no significant relationship between the two)
H1: p <> 0 (There is a significant relationship between the two)
Criteria for Decision:
a = 0.05, 2 tailed
df = 7 - 2 = 5
Critical Value:
0.7545
Decision Rule:
Reject Ho if |test value| ≥ 0.7545
Decision:
|0.980| > 0.7545
Reject Ho
Summary: Monthly E-commerce Sales
There is a significant
Monthly relationship
E-commerce Sales between
Linear (Monthlythe online advertising
E-commerce Sales) cost and the monthly
e-commerce sales
1200

1000
f(x) = 171.47 x + 125.83 D. Find the equation
800 R² = 0.96 of the straight line
that fits the data best.
Axis Title

600

400

200

0
1 1.5 2 2.5 3 3.5 4 4.5 5 5.5
E. Determine whether the model is significant.

Since p = 0.000101695372183606 < a=0.05, the model y = 52.456x - 198.03 is significant

Online advertising cost is a significant predictor of monthly e-commerce sales
F. What would likely be the monthly e-commerce sales if 3.5 (in thousand dollars) be spent for
online advertising.
y = 171.47x + 125.83
y = 171.47(3.5) + 125.83
y = 600.145 + 125.83
y = 725.905 or approx. 726