The sales manager of a company wants to evaluate the performance of the company’s sales representatives. Each representative is solely responsible for one sales territory and the manager thinks it is reasonable to measure performance by using the yearly sales (Sales) of the company’s product in the representative’s territory. Sales are in thousands of dollars. The manager collects data on the following independent variables to predict annual sales: the number of months the sales rep has been employed by the company (Time); sales of the company’s product and competing products in the sales territory (MktPot) or market potential; dollar advertising expenditure in the territory (Adv) and the company’s average market share in the territory over the previous three years (Mktshare).
1. Develop a multiple linear regression equation (MLR) equation to predict Sales.