Group Project - Predictive Model Foundations of Predictive Analytics & Decision Modeling QNT 2020 Group Project on Predictive Models Amita Singh 1-1 Understanding Franchise Performance • Your boss wants your help to understand what drives the performance of stores of the Subway franchise. • Your boss helps you acquire data from last year’s sales and the demographic factors of each store: • • • • • • SALES SQFT INVENTORY ADVERTISING FAMILIES STORES • The EXCEL data file (Franchises.xlxs) has a data dictionary describing the meaning of the variables. Using Simple Linear Regression Models to Understand Franchise Performance • Use the dataset in Franchises.xlxs. • Build a model to establish which individual factors affect sales in our franchises and how? • Can we create a model to help design a store and achieve a certain level of sales? • Which factors are critical to the design of the store: area (sq ft), inventory, advertising spend, size of the sales district, number of competing stores? Using SLR Analysis to Understand Franchise Performance • Examine the Bivariate Relationships • How is the size of the customer base around each store related to our expected sales? • Use the data to determine the relationship between SALES and FAMILIES (the size of the customer base around each store). • Use the data to determine the relationship between SALES and SQFT (the area each store occupies). • Use the data to determine the relationship between SALES and Inventory (the amount of items in each store). • Use the data to determine the relationship between SALES and Advertising (the amount of money each store spends on promotion). • Use the data to determine the relationship between SALES and Stores (the number of competing stores near by each store in our franchise). • Use linear regression to build models to answer these questions. Using SLR Analysis to Understand Franchise Performance • Perform the analysis and then give your answer to the question posed above, with you reason for the answers. • The EXCEL data file has a data dictionary describing the meaning of the variables. Using Multivariate Regression Models to Understand Franchise Performance • Use the same dataset in Franchises.xlxs. • Build a model to answer the questions: • Which collection of factors affect sales in our franchises and how? • Can we create a model to design a store given certain demographics so we can achieve a certain level of sales? • Examine each of the variables and see if any variables need to be transformed to improve the multi-variate model. • Build a multivariate regression model that can be used to predict store sales Prediction Analysis • Use the model to do some analysis. • We just opened a store in a neighborhood with 5,000 families, the store is 5,000 sq ft, we are planning to spend $5,000 a month in advertising, carry $250,000 in inventory and there are 5 competing stores in the neighborhood. • • What are the projected sales? PROJECT REPORT GUIDELINES • You can use the following outline for your project report: • Introduction: introduce the problem, provide some background • Problem Statement: describe the problem you are proposing to solve, • State the assumptions (if any) • Data Sources: list the sources of data you expect to extract data for developing the analysis. • Data Description: describe the data (explain any terms that are specific to your dataset • Methods: discuss your modelling approach, what are the independent variables (co-variates), what is the dependent variable. Provide as much detail about the various models you have in your study. Did you need to transform any variables? How well do the variables fit the model? How well do the variables describe the model? • Results: what is the outcome of your analysis across the different models? • Conclusion: Do you have a recommendation? • Include tables and visuals to support your analysis. • Your project report should be 5-7 pages. PROJECT SUBMISSION DETAILS • Please submit only one report for each group • You can submit in either Word or PDF format • Your group report is due by end of day Jun27th. • Please submit your report to the BB -> Group Project 1 Submission • Only one report per group should be submitted. • Also submit your EXCEL file showing all the models you have developed (one model per worksheet tab).