Executive summary

The study provided an analysis and assessment of book sales on advertising spending in the
months of July, August, and September as in years 2021–2022. The study's primary goal was
to enhance book sales using advertising campaigns. Regression, correlation, a scatter plot,
and a two-sample t test are used in the analysis process. According to the study's findings,
spending on advertising is a factor in book sales.

Task 1:
Sales information for Q3 (July, August, and September) in 2021 and 2022 has been made
available to you. Use a two-sample hypothesis test with a 5% significance level to ascertain
whether the series' overall sales decreased from the previous year. To determine if the series'
mean monthly sales have declined, you will do a hypothesis test on those figures.
To use the two-sample t test we arranged the data book series 1,2, and 3 into year wise 2021
and 2022. We can see in the below table. If don’t arrange the data it quite difficult to handle
book series then two t sample test applicable in books series as book1 and book2, book1 and
book3, book2 and book3.
2021 96 112 89 103 96 86 85 75 105
2022 86 79 108 85 87 69 66 80 91

Hypothesis Test:
H1: µ1=µ2
H2: µ1>=µ2; µ1<=µ2
µ1= sales of books in year 2021
µ2= sales of books in year 2022
Level of Significance:
α=0.05
Test statistic:
x1 −x2
t=
sp

s p=s p
√ 1 1
+
n1 n2

Where s p=
√ ( n1 −1 ) s12+ ( n2−1 ) s 22
n1+ n2−2

With degrees of freedom v=n1 +n2 −2

Here, the sample means µ1 ans µ2, s1 and s2 are the sample standard deviations, n1 and n2
are the sample sizes, and is the predicted difference between the population means (0 if
testing for equal means). The problem has n1 and n2 degrees of freedom, whichever is fewer.
Table 1: t-Test: Two-Sample Assuming Equal 2021 2022
Variances
Mean 94.11111111 83.44444444
Variance 133.1111111 153.2777778
Observations 9 9
Pooled Variance 143.1944444
Hypothesized Mean Difference 0
df 16
t Stat 1.890914517
P(T<=t) one-tail 0.038442373
t Critical one-tail 1.745883676
P(T<=t) two-tail 0.076884746
t Critical two-tail 2.119905299

Conclusion: The result shows that the means for books year 2021 and 2022 are 94.11
and83.44, respectively. We can see from the Variances row that while they are not quite
equal, they are comparable enough to presumptively have equal variances. The crucial metric
is the p-value. The p-value for the one- and two-tailed versions of the t-test for our findings.
Our p-value (0.03) for on tail t test and p-value for two tail is 0.07. The level of significance
use in this test is 0.05, if the p value is less than level of significance, we reject the null
hypothesis. In our case the p value of one tail test is less that 0.05. Therefore, we reject the
null hypothesis and accept the alternative hypothesis. Statistically sales of books in year 2021
and 2022 significantly different with respect to sales.

Task 2:

Linear regression analysis: Regression is a statistical technique used in the fields of

finance, investing, and other disciplines that aim toaimablish the nature and strength of the
relationship between a single dependent variable (often represented by Y) and
numbeseveralndent variables (known as independent variables).

X= 7 different books sold

Y= previous small-scale poster advertising campaigns

Table 2: Regression coefficient

  Coefficients Standard t Stat P-value Lower Upper Lower Upper
Error 95% 95% 95.0% 95.0%
Intercept -20028.45316 30444.38 -0.65787 0.539699 -98288.2 58231.31 -98288.2 58231.31
X 8.409855055 2.614357 3.216796 0.02355 1.689435 15.13027 1.689435 15.13027
Variable
1
y = mx + b.
y = slope * x + intercept.
For the above table, the equation would be approximate:
y = –20028.45+8.40 X1
Table 2 illustrate the equation of linear regression model. The value of coefficient of sales
books is -20028.45316 and the values of books sale per 1 unit is 8.40. Standard error is
30444.38. In regression t test also used and the upper and lower confidence interval is 95%
and the level of significance will be 0.05. The value of upper and lower confidence interval is
-98.288 and 58231.31.
Table 3: Regression Statistics
Multiple R 0.821108972
R Square 0.674219943
Adjusted R Square 0.609063932
Standard Error 37613.54828
Observations 7

Multiple R:
The small-scale poster advertising campaigns and the number of books sold have a strong
positive linear relationship, as indicated by the Multiple R-values of 0.82. This analysis
supports the boss's assertion as being true. If we have increased the budget of advertainments
then the sales of books also increased.
R Square:
The value of r^2 also known as coefficient of determination. The value of r square is 0.67
means that 67% values fall on regression line and 67% of the variation of books sales around
the mean of explained by the advertising campaign. In short term 67% values fit the model.
Adjusted R Square: if we have another variable then the model explained 60% variation in
the model.
Standard error: Standard error also tells us about the goodness of fit of model. The value of
atandard error is 37613.54828 it means the model is not better fit and values are
faraway from the regression line. And the total number of observations is 7.

Line Fit Plot

y sales of Books

200000 Y
100000 Linear (Y)
0
Predicted Y
0 0 00 0 00 0 00 0 0 00 0 00 0 00 0 00 0 00 0 00 Linear (Predicted Y)
20 4 6 8 10 12 1 4 16 18 2 0
X spending on advertisment

Fig 1: Best fit line of spending on advertisement and sales books

Equation of best fit: The higher the correlation between the two variables, or the stronger the
association, the closer the data points are to making a straight line when displayed. The
variables have a positive correlation if the data points form a straight line from the origin to
high y-values. Not every point on the scatter plot is connected by the best line of fit. It only
links a few places together. Data points above and below the line will be present. A line of
best fit has an equation that looks like y= mx+b, where m is the slope and b is the y-intercept.
y = –20028.45+8.40 books sold
y= spending on advertising of $55,000
55,000= –20028.45+8.40 books sold
Books sold = 75020
If the advertising expenditure is 55000, the books will sell for 75020. We find that there is a
linear relationship between increasing advertising spending and as book sales.
Correlation:
The degree to which two or more variables change in relation to one another is indicated by
the statistical concept of correlation. A positive correlation shows how much the two
variables change simultaneously, whereas a negative correlation shows how much one
variable rises as the other falls.
The statistical measure of how well changes in the value of one variable predict changes in
the value of another is called a correlation coefficient. There is a propensity to assume that a
change in one variable must be the result of a change in the other when that change may be
accurately predicted by a change in another variable. Correlation does not, however, prove
causation.
Formula:
S xy
r=
√(S xx ) ( S yy )
Where:
S xx =∑ ( x− x̄ ) =( n−1 ) s x
2 2

S yy =∑ ( y− ȳ )2= ( n−1 ) s 2y
S xy =∑ ( x− x̄ ) ( y− ȳ )

Table 4 Spending on advertising y Total book sales x

Spending on advertising y 1
Total book sales x 0.821108972 1

The table 4 explained the correlation between spending on advertising and total books sales.
The correlation between spending on advertising and total books sales itself always 1. The
correlation between spending on advertising and total books sale is linearly positive (0.82). if
we increase or decrease the spending of advertisement the sales of books also increase or
decrease. They are positive linearly correlate to each other.
 Advertising vs books sale
20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
0
0 20000 40000 60000 80000 100000 120000 140000 160000 180000 200000

Fig 2: Advertising vs books sale

The above graph represents the correlation between spending on advertising and books sales.
They are linearly positive correlated.

Task 3:
a. If we see the sales of books series in year 2022.
Profit= selling price – cost price
Profit= 330 (The profit of sales per books will be 330)
b. If the budget of advertising is $55000, then the sales of books from part 2 data is
6420.
Fixed cost= $55000
Variable cost per book = $10
Selling cost = $34
Total cost= variable cost + fixed cost
Total cost=

Conclusion:
In this part, we provided a succinct summary of the study of sales books based on advertising
campaigns. We also made some recommendations.

The result shows that the means for books year 2021 and 2022 are 94.11 and83.44,
respectively. We can see from the Variances row that while they are not quite equal, they are
comparable enough to presumptively have equal variances. The crucial metric is the p-value.
The p-value for the one- and two-tailed versions of the t-test for our findings. Our p-value
(0.03) for on tail t test and p-value for two tail is 0.07. The level of significance use in this
test is 0.05, if the p value is less than level of significance, we reject the null hypothesis. In
our case the p value of one tail test is less that 0.05. Therefore, we reject the null hypothesis
and accept the alternative hypothesis. Statistically sales of books in year 2021 and 2022
significantly different with respect to sales. Table 2 illustrate the equation of linear regression
model. The value of coefficient of sales books is -20028.45316 and the values of books sale
per 1 unit is 8.40. Standard error is 30444.38. In regression t test also used and the upper and
lower confidence interval is 95% and the level of significance will be 0.05. The value of
upper and lower confidence interval is -98.288 and 58231.31.
The value of r^2 also known as coefficient of determination. The value of r square is 0.67
means that 67% values fall on regression line and 67% of the variation of books sales around
the mean of explained by the advertising campaign. In short term 67% values fit the model.
The correlation between spending on advertising and total books sales itself always 1. The
correlation between spending on advertising and total books sale is linearly positive (0.82). if
we increase or decrease the spending of advertisement the sales of books also increase or
decrease. They are positive linearly correlate to each other. If the advertising expenditure is
55000, the books will sell for 75020. We find that there is a linear relationship between
increasing advertising spending and as book sales.

Recommendations:

We can apply these techniques in the future to increase book sales and make our business and
organization lucrative.

Task 4:
All main parts of reports are explained and mentioned.
1. Executive summary
2. Math’s, Graph, and tables
3. Analysis
4. Conclusion
5. References
 References
1. A Refresher on Regression Analysis. (2022, October 12). Harvard Business Review.

https://hbr.org/2015/11/a-refresher-on-regression-analysis

2. Bevans, R. (2022, July 9). An introduction to t-tests. Scribbr.

https://www.scribbr.com/statistics/t-test/

3. Minitab Blog Editor. (n.d.). How to Interpret Regression Analysis Results: P-values

and Coefficients. https://blog.minitab.com/en/adventures-in-statistics-2/how-to-

interpret-regression-analysis-results-p-values-and-coefficients

4. T Test (Student’s T-Test): Definition and Examples. (2022, April 18). Statistics How

To. https://www.statisticshowto.com/probability-and-statistics/t-test/

5. The Open Educator - 8. Two Sample T-Test Equal Variance. (n.d.-a).

https://www.theopeneducator.com/doe/hypothesis-Testing-Inferential-Statistics-

Analysis-of-Variance-ANOVA/Two-Sample-T-Test-Equal-Variance

6. What is Regression? Definition, Calculation, and Example. (2022, August 18).

Investopedia. https://www.investopedia.com/terms/r/regression.asp