CORRELATION AND REGRESSION ANALYSIS OF THE EXPENDITURE ON ADVERTISEMENT AND AMOUNT REALISED ON SALES
ABSTRACT
The objective of the study is to understand and critically examine whether there is a relationship between advertisement and sales of Osogbo Steel Rolling Company, Osogbo for the period of ten years (1991-2000), using the method of correlation and regression analysis. The method of analysis used in this project is the regression and correlation. Under this, we discussed the least square method of estimation which is considered to be the standard method of obtaining a regression line because it is mathematically based. The least square method is given as: Y = a + bxi + ei a significance test of hypothesis, that is regression coeicient b which is being estimated by b was also carried out to test the relationship between the advertisement and sales. Interval estimation
in simple linear regression and method of estimating correlation were also discussed. All the test carried out was at the 5% level of significance. Finally, analysis of variance was also used to test the relationship between advertisement and sales. The tests carried out are significant.
