3 Interpreting Marketing Data 16 Flashcards

1
Q

What is extrapolation ?

A

It involves the use of trend established by historical data to make predictions about future values

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2
Q

What are the benefits of extrapolation ?

A

A simple method of forecasting
Not much data required
Quick and cheap

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3
Q

What are the drawbacks of extrapolation ?

A

Unreliable if there is a significant fluctuations in historical data
Assumes past trend will continue into the future
Ignores qualitative factors (e.g. changes in tastes and fashion)

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4
Q

What is correlation ?

A

A method of sales forecasting, it looks at the strength of a relationship between 2 variables

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5
Q

What are the confidence intervals?

A

A confidence interval gives the percentage probability that an estimated range of possible values in fact includes the actual value being estimated

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6
Q

Why are the confidence intervals useful as a predictive data tool in business?

A

Businesses benefit from the use of statistics in estimating or predicting future events
A confidence interval helps the business evaluate the reliability

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7
Q

Types of correlation ?

A

Positive, Negative, No Correlation

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8
Q

Positive correlation …

A

A positive relationship exists where as the independent variable increases in value, so does the dependent variable

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9
Q

Negative correlation …

A

A negative relationship where as the independent variable increases in value, the dependent variable falls in values

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10
Q

No correlación …

A

There is no obvious relationship between the independent and dependent variable

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