First, I constructed a scatter plot using the data from the Amazon file. From there, I was able to analyze the pattern present in the data and determine an appropriate polynomial model for the two variables. Specifically, my analysis revealed that a quadratic regression model (second-order polynomial) best fit this relationship.
Explain what the regression model represents.
The regression model represents a mathematical equation that expresses how changes in one variable affect changes in another variable over time—in this case, net income/loss versus sales figures over time.
Provide an evaluation of the validity and usefulness of your findings. My results clearly demonstrate that Amazon’s net income increases as its sales increase; however, at some point beyond approximately $50 million USD in yearly sales revenue, we see profits begin to decline again due to fixed costs or higher overhead expenses associated with larger stores or services offered by Amazon itself.
Therefore, while useful, my findings should be taken with caution as it may not always hold true depending on market conditions and other variables within Amazon’s business operations – such as production costs or competitive pressures from other online retailers which could significantly alter these results in different contexts.