Multiple Linear Regression - Essay Example

24 June 2008 Response to Question: Multiple linear regression differs from simple linear regression in the number of independent variables. While simple linear regression determines the relationship of an independent variable to the dependent variable, multiple linear regression uses two or more predictors or independent variables. In my previous post, time and level of promotion and advertisement are the two independent variables which determine the monthly level of sales for WidgeCorp services.

I apologize for not being able to clarify this. I chose time and level of advertisement and promotion as independent variables because I believe that they are best factors which could explain the monthly sales of a new product after its introduction in the market. As time goes by, it is expected that brand awareness will rise and so does monthly sales. The level of advertisement and promotion during the introduction stage of the product will also directly affect consumer awareness and brand image thereby influencing the level of sales.

Time will be introduced in the model using 1 for the first month, 2 for the second month, 3 for the third, and so on. As it can be noted, the higher the number the farther the time away from the date of product launching and vice versa. On the other hand, the level of advertisement and promotion will be determined by the amount of the expenses incurred by the WidgeCorp Beverages.