Sampson Inc. is a producer of plastic products including bottles and sandwich bags. Management decided they need to be pre-informed about the financial performance of the organization and will use data analytics. As part of their predictive analytics, they are going to use regression analysis. Which of the following is a potential reason for using this method?
A) Sampson would like to understand if a third quarter decrease in sales is attributable to a one-time decrease in shipping cost.
B) Sampson would like to understand if a third quarter increase in sales is attributable to a newly implemented sales tactic.
C) Sampson would like to understand if an increase in the cost of shipping in the North region is attributable to a one-time reduction in selling price.
D) Sampson would like to understand if an increase in the cost of shipping in the North region is attributable to a newly implemented sales tactic.

Question

Quizplus · Accepted Answer

This question requires familiarity with data analytics and more specifically the methodology of predictive analytics. Choice B is correct since it accurately describes a potential reason to use regression analysis namely to evaluate outliers from costs or sales data points. Understanding an increase in sales for a specific time and determining if the newly implemented sales tactic is the cause is a valid potential reason for using the regression analysis. The remaining choices are incorrect because they do not accurately represent a valid combination of independent and dependent variables.