I don’t understand this Statistics question and need help to study.
Respond to your peer discussion in minimum 175 words
The difference in the type of prediction the given cases have is that they are each looking at a different independent variable to determine profitability versus marketing expense. I can understand what they are looking to get, but I don’t think either one can make any decision based on the one independent variable they are looking at.
The Tasty Sub Shop wants to predict yearly revenue for a restaurant based on the number of residents living near it. There are other variables that would impact this decision, like what is the average income of those residents, how many other similar restaurants would they be competing with. There is no information provided as to whether or not these or other variables have already been considered, so predicting the profitability of the site as a potential restaurant location would be foolish on this independent variable alone.
QHIC wants to predict home upkeep expenditures based on the home values. Again, there are other variables that need to be considered, not to mention home values don’t necessarily mean anything about the type of “upkeep” that could be needed. The average income of potential customers again play a part, and the locations of other home improvement centers would have an impact on QHIC’s reach. Is it an upscale area or a more modest area, are there dependable contractors in the area… I think trying to predict which homes to send advertising brochures to just based the one independent variable of home values is not a smart business strategy.