Sales Ad_exp Sales_prom_ exp

468 8 7
604 15 8
696 22 13
724 24 19
756 28 21
784 32 24
829 39 32
853 44 36
860 45 35
896 54 36
914 58 41
926 62 48
938 65 52
947 68 54
971 76 64
 527.05 9.61 -3.86
Sales Ad_exp Sales_prom_ exp Linear_Fcast_Sales Abs_Diff SE
468 8 7 576.92 108.92 11864.16
604 15 8 640.35 36.35 1321.54
696 22 13 688.34 7.66 58.71
724 24 19 684.40 39.60 1568.55
756 28 21 715.12 40.88 1670.80
784 32 24 741.99 42.01 1764.61
829 39 32 778.39 50.61 2561.08
853 44 36 811.01 41.99 1762.94
860 45 35 824.49 35.51 1261.16
896 54 36 907.14 11.14 124.18
914 58 41 926.29 12.29 151.02
926 62 48 937.71 11.71 137.15
938 65 52 951.10 13.10 171.74
947 68 54 972.22 25.22 636.11
971 76 64 1010.51 39.51 1561.17
516.51 26614.91
34.43 1774.33
MAD MSE
SUMMARY OUTPUT Linear

Regression Statistics
Multiple R 0.951432575143
R Square 0.905223945042
Adjusted R S 0.889427935883
Standard Err 47.09468358067
Observations 15

ANOVA
df SS MS F Significance F
Regression 2 254204.02267457 127102.011337285 57.30713 7.24755907013E-07
Residual 12 26614.9106587629 2217.90922156358
Total 14 280818.933333333

Coefficients Standard Error t Stat P-value Lower 95%

Intercept 527.05 30.466636319444 17.2991848190727 7.533E-10 460.666874415925
Ad_exp 9.61 3.84388766087686 2.50088118911226 0.02787 1.23799459282961
Sales_prom_ -3.86 4.62793078268795 -0.834378118554639 0.420368 -13.9448391433927

Linear Model:
Sales = 527.05 + 9.61 * Ad_exp - 3.86 * Sales_prom_exp

R Square = 0.905
SUMMARY OUTPUT Ln (Ad_exp); Ln (Sales_prom_exp)

Regression Statistics
Multiple R 0.999684346322
R Square 0.999
Adjusted R S 0.999263590996
Standard Err 3.843339238558
Observations 15

ANOVA
df SS MS F Significance F
Regression 2 280641.678255302 140320.839127651 9499.587 6.32461075622E-20
Residual 12 177.255078031663 14.7712565026386
Total 14 280818.933333333

Coefficients Standard Error t Stat P-value Lower 95%

Intercept 10.919 7.04071237800077 1.55081767953768 0.146907 -4.42153322684155
Ln (Ad_exp) 211.632 8.42430479539556 25.1216515044242 9.599E-12 193.277465867742
Ln (Sales_pr 11.524 7.84859225753839 1.46826892166002 0.16775 -5.57676941502645

Non-Linear Model:

Sales = 10.92 + 211.63 * ln(Ad_exp) + 11.52 * ln(Sales_prom_exp)

R Square 0.999
 10.92 211.63 11.52
Sales Ln (Ad_exp) Ln (Sales_prom_exp) Non-linear_Fcast_Sales Abs_Diff
468 2.08 1.95 473.42 5.42
604 2.71 2.08 607.99 3.99
696 3.09 2.56 694.64 1.36
724 3.18 2.94 717.43 6.57
756 3.33 3.04 751.21 4.79
784 3.47 3.18 781.00 3.00
829 3.66 3.47 826.19 2.81
853 3.78 3.58 853.07 0.07
860 3.81 3.56 857.50 2.50
896 3.99 3.58 896.41 0.41
914 4.06 3.71 913.03 0.97
926 4.13 3.87 928.97 2.97
938 4.17 3.95 939.89 1.89
947 4.22 3.99 949.87 2.87
971 4.33 4.16 975.37 4.37
43.99
2.93
MAD

Upper 95% Lower 95.0% Upper 95.0%

593.4291 460.666874415925 593.429070595146
17.98822 1.23799459282961 17.9882180954657
6.221951 -13.944839143393 6.22195078487214
Upper 95% Lower 95.0% Upper 95.0%
26.25926 -4.4215332268416 26.2592556915283
229.9874 193.277465867742 229.987432606212
28.62446 -5.5767694150265 28.6244575960766
SE
29.38 Sales and Forecast
15.95 1100
1.84
1000
43.17
22.98 900
Sales Vs Sales
8.97
800 Sales Vs Linear Fcast
7.92 Sales Vs Non Linear Fc
0.01 700
6.23 600
0.17
0.93 500

8.79 400
3.57 400 500 600 700 800 900 1000

8.25
19.09
177.26
11.82
MSE
Sales Vs Sales
Sales Vs Linear Fcast
Sales Vs Non Linear Fcast
 Comparison between Linear & Non-Linear Models

Linear

Models: Sales = 527.05 + 9.61 * Ad_exp - 3.86 * Sales_prom_exp

R Square: 0.905

Independent Variables: Considered in their natural form

Observations: Coefficient for Sales_Prom_exp is negative

This is not a true reflection of the relationship

MAD = 34.43
MSE = 1774.33

Graphically Speaking:
Sales and Forecast
1100

1000

900
Sales Vs Sales
800
Sales Vs Linear Fcast
700

600

500

400
400 500 600 700 800 900 1000
 Non-Linear

Sales = 10.92 + 211.63 * ln(Ad_exp) + 11.52 * ln(Sales_prom_exp)

0.999

Both variables transformed to Logarithmic form

Coefficient for Sales_Prom_exp is positive

This is a better reflection of the relationship

MAD = 2.93
MSE = 11.82

Sales and Forecast

1100

1000

900
les Vs Sales Sales Vs Sales
800
les Vs Linear Fcast Sales Vs Non Linear Fcast
700

600

500

400
400 500 600 700 800 900 1000
 527.05 9.61 -3.86
Sales Ad_exp Sales_prom_ exp Linear_Fcast_Sales Abs_Diff SE
468 8 7 576.92 108.92 11864.16
604 15 8 640.35 36.35 1321.54
696 22 13 688.34 7.66 58.71
724 24 19 684.40 39.60 1568.55
756 28 21 715.12 40.88 1670.80
784 32 24 741.99 42.01 1764.61
829 39 32 778.39 50.61 2561.08
853 44 36 811.01 41.99 1762.94
860 45 35 824.49 35.51 1261.16
896 54 36 907.14 11.14 124.18
914 58 41 926.29 12.29 151.02
926 62 48 937.71 11.71 137.15
938 65 52 951.10 13.10 171.74
947 68 54 972.22 25.22 636.11
971 76 64 1010.51 39.51 1561.17
516.51 26614.91
34.43 1774.33
MAD MSE
SUMMARY OUTPUT Linear

Regression Statistics
Multiple R 0.951432575143
R Square 0.905223945042
Adjusted R S 0.889427935883
Standard Err 47.09468358067
Observations 15

ANOVA
df SS MS F Significance F
Regression 2 254204.02267457 127102.011337285 57.30713 7.24755907013E-07
Residual 12 26614.9106587629 2217.90922156358
Total 14 280818.933333333

Coefficients Standard Error t Stat P-value Lower 95%

Intercept 527.05 30.466636319444 17.2991848190727 7.533E-10 460.666874415925
Ad_exp 9.61 3.84388766087686 2.50088118911226 0.02787 1.23799459282961
Sales_prom_ -3.86 4.62793078268795 -0.834378118554639 0.420368 -13.9448391433927

Linear Model:
Sales = 527.05 + 9.61 * Ad_exp - 3.86 * Sales_prom_exp

R Square = 0.905
SUMMARY OUTPUT Ln (Ad_exp); Ln (Sales_prom_exp)

Regression Statistics
Multiple R 0.999684346322
R Square 0.999
Adjusted R S 0.999263590996
Standard Err 3.843339238558
Observations 15

ANOVA
df SS MS F Significance F
Regression 2 280641.678255302 140320.839127651 9499.587 6.32461075622E-20
Residual 12 177.255078031663 14.7712565026386
Total 14 280818.933333333

Coefficients Standard Error t Stat P-value Lower 95%

Intercept 10.919 7.04071237800077 1.55081767953768 0.146907 -4.42153322684155
Ln (Ad_exp) 211.632 8.42430479539556 25.1216515044242 9.599E-12 193.277465867742
Ln (Sales_pr 11.524 7.84859225753839 1.46826892166002 0.16775 -5.57676941502645

Non-Linear Model:

Sales = 10.92 + 211.63 * ln(Ad_exp) + 11.52 * ln(Sales_prom_exp)

R Square 0.999

SUMMARY OUTPUT Ln(Ad_exp); Inv(Sales_Prom_exp)

Regression Statistics
Multiple R 0.99997527841
R Square 0.99995
Adjusted R S 0.999942317004
Standard Err 1.075655197682
Observations 15

ANOVA
df SS MS F Significance F
Regression 2 280805.048924082 140402.524462041 121346.9 1.46085168366E-26
Residual 12 13.8844092516029 1.15703410430024
Total 14 280818.933333333

Coefficients Standard Error t Stat P-value Lower 95%

Intercept 85.78 6.41074279790068 13.3801613264143 1.425E-08 71.8089642022966
Ln (Ad_exp) 205.48 1.47992747374269 138.841329793039 1.308E-20 202.250613484919
Inv(Sales_P -311.68 23.9956267960856 -12.9892246663579 1.991E-08 -363.966566983653
Model:

Sales = 85.78 + 205.48 * Ln(Ad_exp) - 311.68 * Inv(Sales_Prom_exp)

R Square = 0.99995
 10.92 211.63 11.52
Sales Ln (Ad_exp) Ln (Sales_prom_exp) Non-linear_Fcast_Sales Abs_Diff
468 2.08 1.95 473.42 5.42
604 2.71 2.08 607.99 3.99
696 3.09 2.56 694.64 1.36
724 3.18 2.94 717.43 6.57
756 3.33 3.04 751.21 4.79
784 3.47 3.18 781.00 3.00
829 3.66 3.47 826.19 2.81
853 3.78 3.58 853.07 0.07
860 3.81 3.56 857.50 2.50
896 3.99 3.58 896.41 0.41
914 4.06 3.71 913.03 0.97
926 4.13 3.87 928.97 2.97
938 4.17 3.95 939.89 1.89
947 4.22 3.99 949.87 2.87
971 4.33 4.16 975.37 4.37
43.99
2.93
MAD

Sale
1100

1000

900

800

700

600

Upper 95% Lower 95.0% Upper 95.0% 500

593.4291 460.666874415925 593.429070595146 400
17.98822 1.23799459282961 17.9882180954657 400 500 600 700
6.221951 -13.944839143393 6.22195078487214
Upper 95% Lower 95.0% Upper 95.0%
26.25926 -4.4215332268416 26.2592556915283
229.9874 193.277465867742 229.987432606212
28.62446 -5.5767694150265 28.6244575960766

Upper 95% Lower 95.0% Upper 95.0%

99.74458 71.8089642022966 99.7445815138222
208.6996 202.250613484919 208.699583418455
-259.4026 -363.96656698365 -259.402607945217
 85.78 205.48 -311.68
SE Sales Ln (Ad_exp) Inv(Sales_Prom_exp Non-Linear Model Abs_Diff SE
29.38 468 2.08 0.14 468.52 0.52 0.27
15.95 604 2.71 0.13 603.25 0.75 0.56
1.84 696 3.09 0.08 696.93 0.93 0.87
43.17 724 3.18 0.05 722.38 1.62 2.61
22.98 756 3.33 0.05 755.62 0.38 0.14
8.97 784 3.47 0.04 784.91 0.91 0.83
7.92 829 3.66 0.03 828.81 0.19 0.04
0.01 853 3.78 0.03 854.68 1.68 2.81
6.23 860 3.81 0.03 859.05 0.95 0.91
0.17 896 3.99 0.03 896.76 0.76 0.57
0.93 914 4.06 0.02 912.49 1.51 2.27
8.79 926 4.13 0.02 927.31 1.31 1.71
3.57 938 4.17 0.02 937.52 0.48 0.23
8.25 947 4.22 0.02 947.01 0.01 0.00
19.09 971 4.33 0.02 970.76 0.24 0.06
177.26 12.23 13.88
11.82 0.82 0.93
MSE MAD MSE

Sales and Forecast

Sales Vs Sales
Sales Vs Linear Fcast
Sales Vs Non Linear Fcast
Sales Vs Non-Linear (Inv) Model

600 700 800 900 1000