De La Salle University – Dasmariñas

COLLEGE OF SCIENCE AND COMPUTER STUDIES

MATHEMATICS AND STATISTICS DEPARTMENT
City of Dasmariñas, Cavite

SMATH001LA – Data Analytics for Engineering

2nd Semester / Midterm Period / S.Y. 2020-2021

LABORATORY ACTIVITY #6
CORRELATION AND REGRESSION ANALYSIS

Score:
NAME: RICA CALZA DATE: November 30, 2021

COURSE/YEAR & SECTION: BSA21 PROF.: SIR JEROME BUHAY

All Greens Franchise

The data (X1, X2, X3, X4, X5, X6) are for each franchise store.
X1 = annual net sales/$1000
X2 = area of store in sq. ft./1000
X3 = inventory/$1000
X4 = amount spent on advertizing/$1000
X5 = size of sales district/1000 families
X6 = number of competing stores in district

Perform the following:

1. Determine which variables are correlated.

Pearson's Correlations

Pearson's r p Interpretation
Very Strong Positive
X1 - X2 0.894 *** < .001
Correlation
Very Strong Positive
X1 - X3 0.946 *** < .001
Correlation
Very Strong Positive
X1 - X4 0.914 *** < .001
Correlation
X1 - X5 0.954 *** < .001 Very Strong Positive
 Correlation
- Very Strong Negative
X1 - X6 *** < .001
0.912 Correlation
Very Strong Positive
X2 - X3 0.844 *** < .001
Correlation
X2 - X4 0.749 *** < .001 Strong Positive Correlation
Very Strong Positive
X2 - X5 0.838 *** < .001
Correlation
-
X2 - X6 *** < .001
0.766 Strong Negative Correlation
Very Strong Positive
X3 - X4 0.906 *** < .001
Correlation
Very Strong Positive
X3 - X5 0.864 *** < .001
Correlation
- Very Strong Negative
X3 - X6 *** < .001
0.807 Correlation
X4 - X5 0.795 *** < .001 Strong Positive Correlation
- Very Strong Negative
X4 - X6 *** < .001
0.841 Correlation
Very Strong Negative
X5 - X6 -0.87 *** < .001
Correlation

* p < .05, ** p < .01, *** p <

.001
The table shows the Pearson’s correlation of the given data which mostly results to Positive Correlation.

Linear Regression
Model Summary - annual net sales
Durbin-Watson
Mode
R R² Adjusted R² RMSE Autocorrelation Statistic p
l
192.06
H₀ 0.000 0.000 0.000 0.252 1.479 0.164
2
H₁ 0.894 0.799 0.791 87.725 -0.016 1.438 0.115
 
ANOVA
Model   Sum of Squares df Mean Square F p
H₁ Regression 766689.456 1 766689.456 99.627 < .001
  Residual 192390.896 25 7695.636  
  Total 959080.352 26  
Note.  The intercept model is omitted, as no meaningful information can be shown.
 
Coefficients
95% CI
Mode Unstandardize Standard
  Standardized t p Lower Upper
l d Error
7.75 < .00 210.59 362.55
H₀ (Intercept) 286.574 36.962
3 1 7 1
0.07
H₁ (Intercept) 2.577 33.085 0.939 -65.562 70.716
8
9.98 < .00 103.00
  area of store in sq. ft. 85.389 8.555 0.894 67.770
1 1 8
 
Descriptives
  N Mean SD SE
192.06
annual net sales 27 286.574 36.962
2
area of store in sq. ft. 27 3.326 2.011 0.387

 The R2 reveals that the store's area explains 79.9% of the variation in annual net sales, with the remaining 20.1
percent explained by other variables.
 The ANOVA findings demonstrate that we have a well-fitting model. The intercept 2.577 is not significant in the
coefficients section because its p-value is more than 0.5, but the 85.389 is.
 Annual Net Sales = 2.577 + 85.389*Store Area in sq ft would be the formula.
Linear Regression

Model Summary - annual net sales

Durbin-Watson
Mode
R R² Adjusted R² RMSE Autocorrelation Statistic p
l
192.06
H₀ 0.000 0.000 0.000 0.252 1.479 0.164
2
H₁ 0.946 0.894 0.890 63.776 0.219 1.550 0.210
 
ANOVA
Model   Sum of Squares df Mean Square F p
H₁ Regression 857395.877 1 857395.877 210.798 < .001
  Residual 101684.475 25 4067.379  
  Total 959080.352 26  
Note.  The intercept model is omitted, as no meaningful information can be shown.
 
Coefficients
95% CI
Mode Unstandardize Standard Standardize
  t p Lower Upper
l d Error d
(Intercept < .00 362.55
H₀ 286.574 36.962 7.753 210.597
) 1 1
(Intercept -
H₁ -81.504 28.167 -2.894 0.008 -23.494
) 139.514
14.51 < .00
  inventory 0.950 0.065 0.946 0.815 1.085
9 1
 
Descriptives
  N Mean SD SE
annual net
27 286.574 192.062 36.962
sales
inventory 27 387.481 191.168 36.790

 The R2 reveals that inventory accounts for 89.4 percent of the variation in annual net sales, with other variables
accounting for the remaining 10.4 percent.
 The ANOVA findings demonstrate that we have a well-fitting model. Because the p-value is less than 0.05, the
coefficients -81.504 and 0.950 are significant.
 Annual Net Sales = -81.504 + 0.950*Inventory is the formula.
Linear Regression

Model Summary - annual net sales

Mode
R R² Adjusted R² RMSE
l
H₀ 0.000 0.000 0.000 192.062
H₁ 0.914 0.835 0.829 79.455
 
ANOVA
Model   Sum of Squares df Mean Square F p
H₁ Regression 801254.098 1 801254.098 126.920 < .001
  Residual 157826.254 25 6313.050  
  Total 959080.352 26  
Note.  The intercept model is omitted, as no meaningful information can be shown.
 
Coefficients
Mode Unstandardize Standardize
  Standard Error t p
l d d
< .00
H₀ (Intercept) 286.574 36.962 7.753
1
H₁ (Intercept) -90.150 36.770 -2.452 0.022
11.26 < .00
  amount spent on advertizing 46.509 4.128 0.914
6 1

 The R2 suggests that the amount spent on advertising accounts for 83.5 percent of the variation in annual sales,
with the remaining 16.5 percent explained by other variables.
 The ANOVA findings indicate that our model is well-fitting. The -90.150 and 46.509 coefficients are statistically
significant.
 Annual Net Sales = -90.150 + 46.509*Amount Spent on Advertising would be the formula.
Linear Regression

Model Summary - annual net sales

Durbin-Watson
Mode
R R² Adjusted R² RMSE Autocorrelation Statistic p
l
192.06
H₀ 0.000 0.000 0.000 0.252 1.479 0.164
2
H₁ 0.954 0.910 0.906 58.919 -0.273 2.535 0.171
 
ANOVA
Model   Sum of Squares df Mean Square F p
H₁ Regression 872294.494 1 872294.494 251.278 < .001
  Residual 86785.858 25 3471.434  
  Total 959080.352 26  
Note.  The intercept model is omitted, as no meaningful information can be shown.
 
Coefficients
95% CI
Mode Unstandardize Standardize
  Standard Error t p Lower Upper
l d d
362.55
H₀ (Intercept) 286.574 36.962 7.753 < .001 210.597
1
-
H₁ (Intercept) -58.823 24.563 -2.395 0.024 -8.235
109.412
15.85
  size of sales district 35.635 2.248 0.954 < .001 31.005 40.265
2
 
Descriptives
  N Mean SD SE
2 192.06 36.96
annual net sales 286.574
7 2 2
size of sales 2
9.693 5.140 0.989
district 7

 The R2 demonstrates that the size of the sales district explains 91% of the variation in annual net sales, with the
remaining 9% explained by other variables.
 The ANOVA findings indicate that our model is well-fitting. Statistically significant coefficients are -58.823 and
35.635.
 Annual Net Sales = -58.823 + 35.635*Size of Sales District would be the formula.
Linear Regression

Model Summary - annual net sales

Durbin-Watson
Mode
R R² Adjusted R² RMSE Autocorrelation Statistic p
l
192.06
H₀ 0.000 0.000 0.000 0.252 1.479 0.164
2
H₁ 0.912 0.832 0.825 80.239 0.151 1.581 0.256
 
ANOVA
Model   Sum of Squares df Mean Square F p
H₁ Regression 798122.917 1 798122.917 123.965 < .001
  Residual 160957.435 25 6438.297  
  Total 959080.352 26  
Note.  The intercept model is omitted, as no meaningful information can be shown.
 
Coefficients
95% CI
Unstandardize Standard Standardize
Model   t p Lower Upper
d Error d
H₀ (Intercept) 286.574 36.962 7.753 < .001 210.597 362.551
H₁ (Intercept) 563.593 29.283 19.246 < .001 503.283 623.902
number of competing -
  -35.787 3.214 -0.912 < .001 -42.407 -29.167
stores in district 11.134
 
Descriptives
  N Mean SD SE
286.57 192.06
annual net sales 27 36.962
4 2
number of competing stores in district 27 7.741 4.896 0.942

 The R2 demonstrates that the number of competing stores in the district explains 83.2 percent of the variation
in annual net sales, with the remaining 16.8 percent explained by other variables.
 The ANOVA findings indicate that our model is well-fitting. 563.593 and -35.787 are statistically significant
intercepts.
 Annual Net Sales = 563.593 – 35.787*Number of Competing Stores in the District is the formula.