The marketing department of a popular electronic store is preparing its work plan for the next financial year. The manager is seeking a 20% increase in the advertising budget. He used the simple linear regression technique to analyze the past 10 years' sales and advertising data and noted these results: Correlation = 0.86 For every $1 spent on advertising, the impact is a $5 increase in sales. The manager received approval for the increased advertising budget and rolled out a series of advertising campaigns for the store. Discuss whether the manager's approach is valid. Justify your point of view.
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86. This indicates a strong positive relationship between advertising spending and sales. Show more…
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