What is an intercept?

Answer

Our models can be thought of as algebraic equations, such as y = a1x1 + a2x2 + ? + b or in the simplest terms, y = ax + b.? In this case, b" is the intercept and it helps define how to position the curve.? The larger the value of "b the higher the curve would be positioned in a graph. When we say the 'intercept is recalibrated against some volume,' what that means is?we are solving for the value of the intercept so?when you plug?everything into the equation (multipliers and coefficients), you will get the targeted volume.

Suppose?the targeted volume is 10 (that is, 'some volume' in the parlance below).? Typically, the targeted volume is an average over a particular time period.? Now suppose the modeling equation is y = ax + b.? The coefficient is what we mean by 'a' and the multiplier is 'x.' ?

Now suppose that a = 0.4 and x = 5. We would try to solve for b (the intercept) in the following manner. 10 = 5*0.4 +b b = 8 So basically, b is the value?you need so that when you assume an average value of the multipliers (for example, average price or average promotion level), you will get an average volume as your prediction.

(created by DT Support, last modified by DT Support on 2010-02-12T13:19:20.000Z)