How can we quantify the effectiveness of model

Assignment Help Basic Statistics

Reference no: EM133411869

Question: The objective of this work is for students to learn how to build linear regression models capable of predicting behavior and answer business related questions. The exercise is based on the Alma-Café case study. The case assumes the existence of Boutique Coffee Shop that offers an array of three different coffees from Brazil, Colombia and Peru. The company operates five locations in Metro Vancouver. The company has been operating consistently over the last two years, and is expecting to expand its operations by opening a new location in Langley City. The company has secured a space in Willowbrook Shopping Centre, which gives access to a large client base of regular customers. Prior to opening the location, management needs to understand better the client base they expect to find on this new city. A surveying team was tasked with determining the age demographics of regular weekend customers. Historical data from the companies database has shown there is a relation between a customer age and his/her budget for coffee products. 2- Provided Dataset Attached you will find an excel spreadsheet with two tabs. The first one shows the Age Survey done at the Willowbrook Shopping Centre. The second one contains part of the company's database showing current clients age and average monthly budget. 3- Expected results

As part of the business development team, you are expected to elaborate a brief report of maximum 3 pages answering the following questions:

Is there an actual relation between age and monthly budget?

Can we build a linear regression model for this relation?

How can we quantify the effectiveness of this model?

What is the age distribution for the client base at the new location?

What is the expected budget distribution for this client base?

How reliable are these results? How could we improve these estimates?

Reference no: EM133411869

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