Triangle Mall is trying to convince Sunflower Clothing to rent a location using average disposable income data rather than square footage. Triangle Mall provided 14 samples of current store sales amounts and average disposable incomes, which were plotted on a scatter plot showing a positive relationship. Regression analysis was conducted to test the hypothesis that average disposable income predicts annual sales. The results showed a significant relationship between the variables, with 48% of sales variability explained by income. This supports Triangle Mall's argument that the location would generate estimated annual sales of at least $10.6 million. Therefore, the summary concludes Sunflower should accept Triangle Mall's offer.

1. Regression Analysis Steve Olshefski Kaylie Petro

2. Background Sunflower Clothing company is looking to expand and open new location Triangle Mall wants Sunflower to rent a location Sunflower usually decides based on square footage Triangle Mall attempts to use average disposable income instead vs. square footage

3. Data… Y variable (dependent) what Triangle Mall is trying to explain Annual Sales X variable (independent) what the Annual Sales is based off of Average Disposable Income

4. Samples Triangle Mall was given 14 samples of current stores, the average disposable income in the area, and the amount of sales that were made Triangle mall took that information and put it into a scatter plot to show the strong positive relationship between the two to convince Sunflower their location would be a good choice due to the high disposable income in the area

5. Scatter Plot

6. Scatter Plot Analysis Graph shows that there is a positive relationship between the number of sales that are made based on the average disposable income in the area

7. Hypothesis Null: B1(slope) = 0 No relationship, X variable (annual sales) is not significant Alternative B1(slope) < > 0 There is a relationship and the X variable is significant

8. Data Calculations R Squared = 48% 48% of variability is explained by the disposable income Intercept = - 1.94 Slope = 0.193 P value = 0.0005 Correlation Coefficient 0.698

9. Hypothesis Analysis P value vs. Alpha (0.05) 0.0005 vs. 0.05 Reject the Null since Alpha is > P Value Rejecting the Null shows there is a relationship between the x and y variable and that x is significant to the test

10. Intercept and Slope Analysis Triangle Mall says they will do no less than 10.6 million dollars in sales since the disposable income in the area is no less than $65,000 This 10.6 million dollars was found by using the intercept (-1.94) and the slope (0.193) 1.94/0.193

11. Conclusion Sunflower Clothing Company should take the offer from the Triangle Mall Although it is not as large as their other locations, they will do just as well and in some situations even better than the larger stores.